On April 5, 2012, the Jumpstart Our Business Startups Act of 2012 (the JOBS Act or Act) was signed into law by President Obama (see Legal Update, President Obama Signs JOBS Act (www.practicallaw.com/0-518-7417)). The JOBS Act makes wide-ranging changes to the federal securities laws and rules governing the US capital formation process.
The primary goal of the JOBS Act is to expand and ease methods of capital raising by, and relax the regulatory burden on, smaller companies. The rationale is that encouraging the growth and development of smaller companies and startups will lead to additional job creation.
Several of the provisions of the JOBS Act are immediately effective, but many provisions require the SEC to issue, or amend, implementing rules or regulations within 90 days to a year after the date of enactment. In addition, the Act requires the SEC to conduct several studies examining particular issues before taking additional actions. The full impact of the JOBS Act may not be known for over a year.
A number of current and former SEC members, such as SEC Chairman Mary Schapiro, SEC Commissioner Luis Aguilar and former SEC Chief Accountant Lynn Turner, have criticized the JOBS Act for gutting investor protections that they believe will increase the likelihood of securities fraud. The effect of the JOBS Act on capital raising will depend in large part on the choices the SEC makes in designing regulations to implement the Act.
The JOBS Act includes a number of reforms and other changes to the federal securities laws. For a summary of the key JOBS Act reforms and provisions, including highlights of important practical implications of the new legislation, see the following Practice Notes:
For a chart showing the dates that key reforms to the federal securities laws made by the JOBS Act become effective, see JOBS Act: Effective Dates of Provisions Chart (www.practicallaw.com/4-518-7585).
For a chart showing how the provisions of the JOBS Act apply to foreign private issuers (www.practicallaw.com/1-382-3481) (FPIs), see JOBS Act and FPIs: How the JOBS Act Applies to Foreign Companies Chart (www.practicallaw.com/4-519-0489).
Practical Law Legal Updates on New Rulemaking and Guidance
On-ramp to the Capital Markets for Emerging Growth Companies
June 24, 2014. SEC Orders Exchanges and FINRA to Submit Tick Size Pilot Plan (www.practicallaw.com/6-572-5206).
December 20, 2013. SEC Releases JOBS Act Report on Review of Disclosure Requirements in Regulation S-K (www.practicallaw.com/2-553-1045).
January 10, 2013. SEC Advisory Committee on Small and Emerging Companies Meeting Announced (www.practicallaw.com/7-523-6424).
December 21, 2012. SEC to Hold Decimalization Roundtable (www.practicallaw.com/8-523-3241).
November 2, 2012. FINRA Issues Regulatory Notice on NASD Rule 2711 Amendments (www.practicallaw.com/7-522-2417).
October 15, 2012. SEC Sets Mandatory Transition Date for EDGAR-based Submission of Confidential Draft Registration Statements (www.practicallaw.com/1-521-8338).
October 11, 2012. SEC Approves NASD Rule 2711 Amendments Conforming Rule with JOBS Act (www.practicallaw.com/9-521-8532).
October 5, 2012. SEC Adopts Updated EDGAR Filer Manual (www.practicallaw.com/9-521-7250).
September 28, 2012. FINRA Proposes Rule Changes Amending NASD Rule 2711 to Conform with JOBS Act (www.practicallaw.com/9-521-6613).
September 28, 2012. SEC Staff Releases Additional JOBS Act Title I FAQs (Questions 42-54) to Address Mergers and Exchange Offers (www.practicallaw.com/9-521-6359).
September 26, 2012. EDGAR-based System for EGCs and Foreign Private Issuers Available October 1 (www.practicallaw.com/9-521-5755).
September 7, 2012. SEC Releases Updated EDGAR Filer Manual (www.practicallaw.com/0-521-3483).
August 22, 2012. JOBS Act Research Analyst and Underwriter FAQs Released (www.practicallaw.com/8-521-0522).
July 20, 2012. SEC Releases Report on Decimalization as Required by JOBS Act (www.practicallaw.com/3-520-5387).
May 30, 2012. SEC Updates Policy on Nonpublic Submissions by Foreign Private Issuers (www.practicallaw.com/8-519-7276).
May 11, 2012. SEC Staff Issues Instructions for Submitting Draft Registration Statements under JOBS Act (www.practicallaw.com/1-519-4295).
May 4, 2012. NYSE Proposes to Permit the Listing of Emerging Growth Companies Based on Two Years of Reported Financials (www.practicallaw.com/8-519-3546).
May 3, 2012. SEC Staff Releases Additional JOBS Act Title I FAQs (Questions 18-41) (www.practicallaw.com/9-519-2990).
April 23, 2012. First IPOs by Emerging Growth Companies Price (www.practicallaw.com/6-519-0681).
April 16, 2012. SEC Staff Releases Additional JOBS Act Title I FAQs (www.practicallaw.com/5-519-0016).
April 11, 2012. SEC Staff Discusses Additional JOBS Act Guidance (www.practicallaw.com/9-518-9247).
April 10, 2012. JOBS Act Confidential Registration Statement Submission FAQs Released (www.practicallaw.com/6-518-8843).
April 5, 2012. SEC Division of Corporation Finance Issues Guidance on Confidential Registration Statement Submission under JOBS Act (www.practicallaw.com/0-518-8619).
Regulation D and Rule 144A General Solicitation
July 3, 2014. SEC Issues New C&DIs on Accredited Investor Definition and Rule 506(c) "Reasonable Steps" Verification Safe Harbors (www.practicallaw.com/8-573-4525).
June 30, 2014. FINRA Begins Public Dissemination of Rule 144A Transaction Data through TRACE (www.practicallaw.com/6-573-0665).
June 23, 2014. Accredited Investor Verification: SIFMA Issues Guidance (www.practicallaw.com/4-572-5325).
January 23, 2014. SEC Issues New C&DIs on Rule 506(c) (www.practicallaw.com/2-555-3725).
November 13, 2013. SEC Staff Issues C&DIs on Securities Act Rules 144A and 506(c) (www.practicallaw.com/4-549-2547).
September 23, 2013. September 23, 2013: General Solicitation and Bad Actor Rule Changes Take Effect (www.practicallaw.com/8-541-8386).
July 10, 2013. SEC Approves Final JOBS Act General Solicitation Rules (www.practicallaw.com/6-534-0925).
July 10, 2013. SEC Proposes Rule Amendments to Evaluate the Rule 506 Market Once General Solicitation is Lifted (www.practicallaw.com/4-534-0865).
March 28, 2013. No-action Relief Granted to Second "Accredited Crowdfunding" Platform (www.practicallaw.com/5-525-5201).
March 26, 2013. No-action Relief Granted to "Accredited Crowdfunding" Platform (www.practicallaw.com/9-525-4860).
February 5, 2013. JOBS Act FAQs About Broker-dealer Registration Exemption (www.practicallaw.com/8-524-0473).
August 29, 2012. SEC Proposes JOBS Act General Solicitation Rules (www.practicallaw.com/5-520-9488).
July 2, 2012. SEC Schedules Meeting to Consider General Solicitation Rulemaking under JOBS Act (www.practicallaw.com/8-520-1834).
June 28, 2012. SEC Will Miss JOBS Act Rulemaking Deadline for Regulation D and Rule 144A (www.practicallaw.com/5-520-1232).
April 5, 2012. Report by 14 Firms on Immediate Effect of JOBS Act on Private Placements Released (www.practicallaw.com/2-518-8623).
Exemption for Certain Securities (Small Company Capital Formation)
Shareholder Thresholds for Exchange Act Registration