July 24, 2012
The Jumpstart Our Business Startups Act (“JOBS Act”) was enacted on April 5, 2012. The SEC has provided guidance on its implementation though a series of Frequently Asked Questions (“FAQ”) and other releases. More such FAQs, releases and rulemaking are expected.
On April 10, 2012, the Division of Corporation Finance (“Corp Fin”) released 13 questions relating to the confidential submission of registration statements for review under the JOBS Act. Under the JOBS Act, an emerging growth company (“EGC”) may confidentially submit to the Commission a draft registration statement for confidential, non-public review by the Commission’s staff prior to public filing, provided that the initial confidential submission will be filed publicly not later than 21 days before the issuer’s road show. These FAQs can be found at http://www.sec.gov/divisions/corpfin/guidance/cfjumpstartfaq.htm. Additional guidance regarding submission of the draft registration statements for confidential review can be found at http://www.sec.gov/divisions/corpfin/cfannouncements/secureemail.htm
On April 11, 2012, Corp Fin released 5 FAQs related to Titles V and VI of the JOBS Act. Those sections amended Section 12(g) and Section 15(d) of the Exchange Act. These FAQs provide guidance as to how the rules affecting the requirement of issuers (including bank holding companies) to register a class of equity security under Section 12(g) and the ability of bank holding companies to deregister a class of equity security under Section 12(g) or to suspend a reporting obligation under Section 15(d) change. These FAQs can be found at http://www.sec.gov/divisions/corpfin/guidance/cfjjobsactfaq-12g.htm
Title I of the JOBS Act provides scaled disclosure provisions for EGCs, including, among other things, two years of audited financial statements in the registration statement of an initial public offering, the smaller reporting company version of Item 402 of Regulation S-K, and no requirement for Sarbanes-Oxley Act Section 404(b) auditor attestations of internal control over financial reporting. Title I also allows EGCs to use test-the-waters communications with Qualified Institutional Buyers (“QIB”) and institutional accredited investors, and liberalizes the use of research reports on EGCs. 41 FAQs were released by Corp Fin to provide guidance on the implementation and application on the JOBS Act. They were issued on April 16, 2012 and May 3, 2012, and can be found at http://www.sec.gov/divisions/corpfin/guidance/cfjjobsactfaq-title-i-general.htm
On May 7, 2012, the Division of Trading and Markets released 5 FAQs regarding the implementation of the crowdfunding provisions which were included in Title III of the JOBS Act. The crowdfunding provisions allow issuers to offer and sell up to $1 million in securities, provided that the individual investment does not exceed certain thresholds and the issuer satisfies other conditions, one of which was that they use an intermediary that is a broker or a funding portal, both of which must be registered with the SEC. Those questions can be found at http://www.sec.gov/divisions/marketreg/tmjobsact-crowdfundingintermediariesfaq.htm
EisnerAmper previously issued an analysis of the JOBS Act and crowdfunding. That analysis can be found at http://www.eisneramper.com/jobs-act-crowdfunding-0412.aspx