Revitalizing U.S. Capital Markets: The Case for State-Led Reform

As we approach the country’s 250th anniversary, the U.S. capital markets are at a crossroads.

U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins noted in a December 2025 speech that the number of U.S. exchange-listed public companies has dropped sharply over the past two decades. This contraction, as the Chairman indicated, is not the result of diminished entrepreneurial ambition but the combined impact of overly complex regulations, excessive litigation, and the politicization of shareholder governance.

Chairman Atkins identifies three pillars for reform to reverse this trend at the federal level:

• Recalibrating SEC disclosure requirements
• Depoliticizing shareholder meetings
• Reducing frivolous lawsuits

While federal reforms are important to accomplish these and other steps to make the U.S. capital markets attractive once again, meaningful changes can and must also occur at the state level. This analysis argues that targeted state reforms are the best way to revitalize U.S. capital markets and looks at:

• The causes and consequences of declining U.S. stock exchange-listed companies
• The need for state-level reforms
• The legislation states can enact to limit abusive litigation
• The role of proxy advisory firms and holding these accountable

To download a copy of the analysis, please click here.