Bewailing the dearth of risk capital, many a U.S. underwriter had laid part of the blame on the high costs of "red tape" required by the Securities & Exchange Commission's registration rules. This week, the SEC said: not so. After analyzing the costs of 715 issues (worth $8.5 billion) floated through 1945-47, the SEC found that registration cost only one penny out of every $100 raised.
For all the issues studied, the overall cost was $2.48 for every $100 raised—and $1.88 of that went for underwriters' commissions and discounts. But these figures failed by far to tell the whole story....
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