In 2011, the SEC created the Advisory Committee on Small and Emerging Companies.

This committee was formed to offer advice on the rules, regulations, and policies related to new, growing companies. It examines:

  • Capital raising by emerging and privately held small businesses and publicly traded companies with less than $250 million in public market capitalization;
  • Trading in the securities of such businesses and companies; and
  • Public reporting and corporate governance requirements to which these businesses and companies are subject.

Read: Small biz confidence takes hit

On February 1, 2013, this committee made several suggestions regarding how regulators should deal with and support small businesses. It looked at disclosure requirements, and at the access these companies have to public markets.

It also recommends that a separate U.S. equity market be established for the holdings of emerging companies.

The committee says in its proposal, “The current U.S. equity markets often fail to offer a satisfactory trading venue for the securities of small and emerging companies because they fail to provide sufficient liquidity for such securities. The listing requirements are too onerous.”

Read: Help small businesses through big issues

What’s more, “the frequent failure of…markets to offer a satisfactory trading venue for [these] companies has discouraged initial public offerings of the securities of such companies.” It adds this undermines entrepreneurship and weakens the broader U.S. economy.

Read: IPOs bouncing back

Within this new market, the committee says the SEC “would [need to] limit investor participation to accredited investors who meet a standard [that’s] designed to assure regulatory protection afforded is appropriate given the characteristics of these investors.”

It also suggests it be established under Section 6 of the Securities Exchange Act of 1934, meaning it would be an alternative trading system operated under a separate but appropriately regulated trading venue.

Though their suggestions offer support to small businesses and the U.S. economy, experts like Wall Street blogger Bill Singer question how far their proposals will go.

In a recent post, Singer calls the committee “another blue ribbon panel coming out with yet another batch of recommendations to yet another government organization.”

In addition, he says, “These…undertakings [often] result in little more than an unending stream of…broad brush recommendations that never quite seem to attract the full support of the organizations.” Read more.