BIO Applauds Introduction of Spread Pricing Liquidity Act.
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Press Release Summary:
BIO thanked Representative David Schweikert (R-AZ) for introducing H.R. 1952, Spread Pricing Liquidity Act, which is designed to increase liquidity and spur capital formation for small businesses, including emerging biotech companies, that are traded on the public market. In comment, BIO President and CEO Jim Greenwood said that "The Spread Pricing Liquidity Act takes an important step toward granting tick size flexibility to emerging biotech companies."
Original Press Release:
BIO Applauds Rep. David Schweikert for Introducing Spread Pricing Liquidity Act
H.R. 1952 will stimulate trading for small public companies
WASHINGTON--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.
“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.”
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.
About BIO
BIO represents more than 1,100 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the BIO International Convention, the world’s largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world. BIO produces BIOtechNOW, an online portal and monthly newsletter chronicling “innovations transforming our world.” Subscribe to BIOtechNOW.
