Representatives from the Hyperliquid Policy Center and trade[XYZ] have submitted a joint letter to the U.S. Securities and Exchange Commission (SEC) outlining suggestions for the modernization of the IPO process.
The primary concept is to establish regulations for pre-IPO perpetuals (IPOP). According to the authors, this derivative provides investors with price exposure to an issuer's securities before they are listed.
This instrument does not confer ownership of shares, allocation rights, or any voting privileges, nor does it impose any requirements on the company. Once public trading commences, the IPOP is intended to cease to exist rather than evolve into a "perpetual synthetic market" for the private company.
The authors of the letter noted that the first IPOP market for Cerebras lasted for 13 days. They also pointed out that the number of companies listed on U.S. exchanges has decreased by 40% compared to the mid-1990s.
The letter cites five completed IPOP markets on Hyperliquid as examples, including:
- Cerebras — IPO price of $185 (opened at $350);
- SpaceX — $135 (opened at $150);
- SK Hynix — $149 (opened at $170);
- ChangXin Memory Technologies (CXMT) — 8.66 yuan (opened at 49.5 yuan).
The SEC was asked to consider five key areas: classification, disclosure requirements, listing rules, measures to ensure integrity, and a phased rollout of markets in the U.S. for different investor categories with limits on leverage and positions.
The potential utility of this instrument in direct listings, where there is no established public pricing mechanism in advance, was also highlighted.
It is worth noting that in June, the CFTC and SEC requested public feedback on the definitions of swaps and other derivative instruments.