The Biotechnology Industry Organization (BIO) today thanks Representative David Schweikert (R-AZ) for introducing H.R. 1952, the Spread Pricing Liquidity Act. H.R. 1952 is designed to increase liquidity and spur capital formation for small businesses, including emerging biotech companies that are traded on the public market.
Under current U.S. Securities and Exchange Commission (SEC) rules, all securities on the public market are priced in $0.01 increments. This minimum trading increment is known as the “tick size.” The switch to a universal tick size of one penny was enacted in 2000 in order to boost trading in large company stocks, but many smaller issuers have experienced the opposite effect. The Spread Pricing Liquidity Act will grant tick size flexibility to growing companies and increase the liquidity and capital availability necessary for emerging biotech companies to be successful on the public market.
Jim Greenwood, BIO’s President and CEO, made the following statement:
“BIO applauds Rep. Schweikert for introducing this important legislation. Growing biotech companies often turn to the public market to access the large sums of capital necessary to fund expensive clinical trials. However, the current one-size-fits-all tick size does not reflect the realities of the market for smaller companies and subjects these smaller issuers to the same trading framework as large, multinational companies with exponentially higher trading volumes and market caps.
“Without strong liquidity available for small public companies, emerging biotech companies can have difficulties raising the capital necessary to fund the decade-long, billion-dollar development timeline intrinsic to groundbreaking R&D.
“The Spread Pricing Liquidity Act takes an important step toward granting tick size flexibility to emerging biotech companies.”
For more information on the biotechnology industry and emerging biotech companies in particular, please visit http://www.bio.org.
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World Congress on Industrial Biotechnology
June 16-19, 2013
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October 8-9, 2013
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November 6-8, 2013
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November 11-13, 2013
Pacific Rim Summit on Industrial Biotechnology & Bioenergy
December 8-11, 2013
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February 10 – 11, 2014
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