[House Report 119-247]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-247
======================================================================
EXPANDING WKSI ELIGIBILITY ACT
_______
September 8, 2025.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Hill of Arkansas, from the Committee on Financial Services,
submitted the following
R E P O R T
[To accompany H.R. 4430]
The Committee on Financial Services, to whom was referred
the bill (H.R. 4430) to lower the aggregate market value of
voting and non-voting common equity necessary for an issuer to
qualify as a well-known seasoned issuer, having considered the
same, reports favorably thereon with an amendment and
recommends that the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Committee Consideration.......................................... 2
Related Hearings................................................. 3
Committee Votes.................................................. 4
Committee Oversight Findings..................................... 6
Performance Goals and Objectives................................. 6
Committee Cost Estimate.......................................... 6
New Budget Authority and CBO Cost Estimate....................... 6
Unfunded Mandates Statement...................................... 6
Earmark Statement................................................ 6
Federal Advisory Committee Act Statement......................... 7
Applicability to the Legislative Branch.......................... 7
Duplication of Federal Programs.................................. 7
Section-by-Section Analysis of the Legislation................... 7
Changes in Existing Law Made by the Bill, as Reported............ 7
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Expanding WKSI Eligibility Act''.
SEC. 2. DEFINITION OF WELL-KNOWN SEASONED ISSUER.
(a) In General.--For purposes of the Federal securities laws, and
regulations issued thereunder, an issuer shall be a ``well-known
seasoned issuer'' if--
(1) the aggregate market value of the voting and non-voting
common equity held by non-affiliates of the issuer is
$400,000,000 or more (as determined under Form S-3 general
instruction I.B.1. as in effect on the date of enactment of
this Act); and
(2) the issuer otherwise satisfies the requirements of the
definition of ``well-known seasoned issuer'' contained in
section 230.405 of title 17, Code of Federal Regulations (as in
effect on the date of enactment of this Act) without reference
to any requirement in such definition relating to minimum
worldwide market value of outstanding voting and non-voting
common equity held by non-affiliates.
(b) Report on Withdrawn Applications Related to Well-known Seasoned
Issuer Status.--The Securities and Exchange Commission shall, not later
than 90 days after the end of each calendar year, publish the total
number of applications submitted during such calendar year where the
applicant--
(1) submitted the application under section 230.405 of title
17, Code of Federal Regulations, for a determination by the
Commission that the applicant not be considered an ineligible
issuer under such section;
(2) requested such determination in order to meet the
definition of a well-known seasoned issuer under such section;
and
(3) withdrew the application.
PURPOSE AND SUMMARY
H.R. 4430, the Expanding WKSI Eligibility Act, was
introduced on July 16, 2025, by Republican Representative Bryan
Steil (WI-01). H.R. 4430 updates the definition of Well-Known
Seasoned Issuer (WKSI) status by lowering the public float
requirement from $700 million to $400 million to extend its
benefits to a larger number of companies. Additionally, the
bill requires the Securities and Exchange Commission (SEC) to
publish the total number of WKSI waiver applications and
withdrawals.
BACKGROUND AND NEED FOR LEGISLATION
Currently, WKSI status is unduly limited. The last two
decades of successful experience have shown that the WKSI
category merits expansion. First, since the introduction of the
WKSI definition nearly two decades ago, the automatic shelf
registration process and other benefits available to WKSI
issuers have significantly improved capital formation and
market efficiency without compromising investor protection.
When initially proposing the WKSI category, the SEC
acknowledged that a much lower float test for WKSI status could
be appropriate.
Second, for the last three decades, companies with a public
float of $75 million have been able to engage in short-form
registration of securities using the integrated disclosure
system based on those companies' periodic reporting. As a
result, Congress should require a much lower public float test
for WKSI status. By updating the WKSI definition to apply to
companies with a public float of $400 million, H.R. 4430 allows
qualified companies to use the shelf registration process,
saving them time and money when they go to the public markets
to raise capital.
COMMITTEE CONSIDERATION
119TH CONGRESS
On July 16, 2025, Representative Steil introduced H.R.
4430, the Expanding WKSI Eligibility Act. Representatives Cleo
Fields (D-LA), Daniel Meuser (R-PA), and James Himes (D-CT)
were added subsequently as cosponsors. The bill was referred
solely to the Committee on Financial Services. The bill was
attached to the February 26, 2025, hearing titled ``The Future
of American Capital: Strengthening Public and Private Markets
by Increasing Investor Access and Facilitating Capital
Formation,'' and the March 25, 2025, hearing titled, ``Beyond
Silicon Valley: Expanding Access to Capital Across America.''
On July 25, 2025, the Committee on Financial Services met
in open session to consider, among others, H.R. 4430. The
Committee ordered H.R. 4430, as amended, to be favorably
reported to the House of Representatives.
118TH CONGRESS
On April 13, 2023, Representative Steil introduced H.R.
2625, a bill to lower the aggregate market value of voting and
non-voting common equity necessary for an issuer to qualify as
a well-known seasoned issuer. This bill is an earlier iteration
of H.R. 4430. The bill was referred solely to the Committee on
Financial Services. There was no further action on the bill in
the 118th Congress.
117TH CONGRESS
On December 14, 2022, Representative Steil introduced H.R.
9562, a bill to lower the aggregate market value of voting and
non-voting common equity necessary for an issuer to qualify as
a well-known seasoned issuer. This bill is an earlier iteration
of H.R. 4430. The bill was referred solely to the Committee on
Financial Services. There was no further action on the bill in
the 117th Congress.
RELATED HEARINGS
Pursuant to clause 3(c)(6) of rule XIII of the Rules of the
House of Representatives, the following hearings were used to
develop H.R. 4430:
The Capital Markets Subcommittee of the Committee on
Financial Services held a February 26, 2025, hearing titled
``The Future of American Capital: Strengthening Public and
Private Markets by Increasing Investor Access and Facilitating
Capital Formation'' and the Full Committee held a March 25,
2025, hearing titled, ``Beyond Silicon Valley: Expanding Access
to Capital Across America.'' A discussion draft version of the
bill was attached to both hearings. The following witnesses
testified at the February 26, 2025, hearing: Mr. Andrew
Barnell, CEO and Co-Founder, Geneoscopy; Mr. McKeever Conwell,
Founder and Managing Partner, RareBreed Ventures; Ms. Rebecca
Kacaba, CEO and Co-Founder, DealMaker; Ms. Anna Pinedo,
Partner, Mayer Brown; and Ms. Alexandra Thornton, Senior
Director, Financial Regulation, Center for American Progress.
The following witnesses testified at the March 25, 2025,
hearing: Mr. Steve Case, Chairman and CEO, Revolution LLC; Mr.
Bill Newell, Senior Business Advisor & Former CEO, Sutro
Biopharma; Ms. Candice Matthews Brackeen, General Partner,
Lightship Capital; Mr. Joel Trotter, Partner, Latham & Watkins
LLP; and Ms. Amanda Senn, Director of the Alabama Securities
Commission.
COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include record
votes on the motion to report legislation and amendments
thereto.
On July 22, 2025, the Committee ordered H.R. 4430, as
amended, to be reported favorably to the House by a recorded
vote of 51 yeas and 2 nays. (Record Vote No. FC-174).
Before the question to report was called, the Committee
adopted an amendment in the nature of a substitute offered by
Representative Steil, designated as Steil_028, which adjusts
the threshold for issuers to be considered as WKSI and requires
the SEC to publish the total number of WKSI applications and
withdrawals submitted. This amendment was adopted by voice
vote.
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives
are incorporated in the descriptive portions of this report.
PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the goal of H.R. 4430 is to update
the WKSI definition to allow qualified companies to use the
self-registration process, saving the companies time and money
when they go to the public markets to raise capital.
COMMITTEE COST ESTIMATE
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 4430. The
Committee has requested but not received a cost estimate from
the Director of the Congressional Budget Office. However,
pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee will adopt as its own
the cost estimate by the Director of the Congressional Budget
Office once it has been prepared.
NEW BUDGET AUTHORITY AND CBO COST ESTIMATE
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee will adopt as
its own the cost estimate for the bill prepared by the Director
of the Congressional Budget Office. However, a cost estimate
was not made available to the Committee in time for the filing
of this report. The Chairman of the Committee shall cause such
estimate to be printed in the Congressional Record upon its
receipt by the Committee.
UNFUNDED MANDATES STATEMENT
The Committee has requested but not received from the
Director of the Congressional Budget Office an estimate of the
Federal mandates pursuant to section 423 of the Unfunded
Mandates Reform Act. The Chairman of the Committee shall cause
such estimate to be printed in the Congressional Record upon
its receipt by the Committee.
EARMARK STATEMENT
In compliance with clause 9 of rule XXI of the Rules of the
House of Representatives, this bill, as reported, contains no
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI.
FEDERAL ADVISORY COMMITTEE ACT STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
APPLICABILITY TO THE LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
Federal program, including any program that was included in a
report to Congress pursuant to section 21 of the Public Law
111-139 or the most recent Catalog of Federal Domestic
Assistance.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Short title
Section 1 provides the short title is the ``Expanding WKSI
Eligibility Act.''
Section 2. Definition of well-known seasoned issuer
Section 2 provides that an issuer shall be considered a
WKSI if the aggregate market value of the voting and non-voting
common equity held by non-affiliates of the issuer is
$400,000,000 or more and the issuer otherwise satisfies the
requirements of the definition of WKSI. Section 2 requires the
SEC, within 90 days after each calendar year, to publish the
total number of applications in which an issuer sought a
determination that it should not be considered an ``ineligible
issuer,'' in order to qualify as a well-known seasoned issuer,
but later withdrew the application.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
H.R. 4430 does not repeal or amend any section of a
statute. Therefore, the Office of Legislative Counsel did not
prepare the report required under clause 3(e) of rule XIII of
the House of Representatives.
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