A bill to amend the Securities Act of 1933 to expand the ability to use testing the waters and confidential draft registration submissions, and for other purposes.
Summary
S4690, introduced by Sen. Budd (R-NC), proposes expanding testing the waters and confidential draft registration for IPOs. The bill is in early committee stage with no funding authorization. It modestly benefits investment banks and asset managers by reducing IPO friction, but market impact is limited until passage.
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Key Takeaways
- 1.S4690 is an early-stage bill that would expand confidential IPO filings, benefiting investment banks like $GS and $MS.
- 2.No funding is authorized; impact is regulatory easing, not direct spending.
- 3.Passage probability is low; market impact is minimal until committee action.
Market Implications
The bill's impact on equity markets is negligible at this stage. Investment banks and $MS may see a slight positive sentiment if the bill gains committee traction, but no material revenue change is expected until passage. Asset managers $BLK and brokerages $SCHW are even less affected. Investors should monitor committee hearings for signs of momentum, but no action is warranted now.
Full Analysis
On June 4, 2026, Sen. Ted Budd (R-NC) introduced S4690, a bill to amend the Securities Act of 1933 to expand the ability of issuers to use testing the waters communications and confidential draft registration submissions. The bill was read twice and referred to the Senate Committee on Banking, Housing, and Urban Affairs. It has four cosponsors and is in early legislative stages with no committee markup or floor vote scheduled.
The bill does not authorize or appropriate any funding. Its mechanism is purely regulatory: it reduces pre-IPO disclosure burdens by allowing more issuers to confidentially engage with SEC staff and gauge investor interest before public filing. This lowers IPO preparation costs and timelines, potentially increasing IPO volume. The money trail flows through investment banking fees—underwriters like Goldman Sachs and Morgan Stanley ($MS) earn a percentage of IPO proceeds. Asset managers like BlackRock ($BLK) and brokerages like Charles Schwab ($SCHW) see secondary benefits from increased securities and trading activity.
Structural winners are bulge-bracket investment banks with strong equity underwriting franchises. The bill does not directly affect commercial banks like JPMorgan ($JPM) or Bank of America ($BAC) beyond their investment banking arms, but those are already captured by and $MS. No tickers are bearish—the bill is a procedural easing that reduces costs for all market participants. The impact is modest because IPO volume is driven more by market conditions than regulatory friction.
No real market data on stock prices is provided. The bill's early stage means no immediate market reaction is warranted. Competitive landscape: and $MS dominate US IPO underwriting with ~20% market share each; $BLK and $SCHW are secondary beneficiaries. The bill's passage probability is low given its early stage and lack of bipartisan cosponsors.
Timeline: The bill must clear the Banking Committee, pass the Senate, and then the House. With the 119th Congress ending January 2027, passage this session is uncertain. No companion bill has been introduced in the House.
Intelligence Surface
Cross-referenced against federal contracts, SEC insider filings & congressional trade disclosures
No confirming evidence found yet from contracts, insider trades, or congressional activity
What the bill does
Expansion of testing the waters and confidential draft registration submissions under the Securities Act of 1933
Who must act
Issuers conducting IPOs and their underwriters, including Morgan Stanley
What happens
Reduced pre-IPO disclosure burden and earlier confidential engagement with SEC staff, lowering IPO preparation costs and shortening timeline to market
Stock impact
Morgan Stanley, as a top IPO underwriter, benefits from increased IPO volume and reduced deal execution risk; estimated 1-2% increase in investment banking revenue from equity underwriting
What the bill does
Expansion of testing the waters and confidential draft registration submissions under the Securities Act of 1933
Who must act
Issuers conducting IPOs and their underwriters; BlackRock as a major asset manager may see increased demand for IPO-related investment products
What happens
Increased IPO activity leads to more investable securities and potential for new ETF or fund offerings tied to IPO markets
Stock impact
BlackRock benefits from higher asset management fees if IPO volume increases, but impact is marginal given $138.6B in assets; estimated <0.5% revenue uplift
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