The Securities and Exchange Commission issued a statement (see link) that seeks innovative proposals that would improve the secondary market structure for exchange listed equity securities that trade in lower volumes, or “thinly traded securities.” Small cap companies are particularly adversely affected by limited liquidity. The Commission also shared a background paper produced by the Staff of the Division of Trading & Markets (background paper found here) that outlines prior studies and data relating to thinly traded securities and discusses the issues raised by the Treasury Department’s 2017 Capital Markets report. The background paper focuses on market structure issues, but does not address equity research, the lack of which affects small cap issuers and the liquidity of their stocks.

[View source.]