Obama Signs JOBS Act into Law
- President Obama today signed into law H.R. 3606, the Jumpstart Our Business Startups Act. The Act's provisions are immediately effective with respect to emerging growth companies (essentially, issuers with total annual gross revenues of less than $1 billion, unless they sold securities pursuant to an effective registration statement on or before December 8, 2011). Companies that meet this requirement, and that are now registered or considering registering with the Securities and Exchange Commission, should immediately review the Act to consider its implications and to decide whether the company optionally should forgo the emerging growth company exemptions under Section 107 of the Act.
Also immediately effective are the changes to the registration threshold of the Securities Exchange Act of 1934. Under prior law, issuers with at least $1 million in total assets were required to register under the 1934 Act within 120 days after the last day of a fiscal year on which the issuer had a class of equity security held of record by 500 or more persons. The JOBS Act largely retains this standard, but carves out accredited investors (subject to a 2000-holder limit) and persons who received the securities in exempt transactions pursuant to an employee compensation plan. The change may be significant for companies with a calendar fiscal year that otherwise would have exceeded the 500-investor limit.
More significant changes are on the way, including a removal of the ban on general advertising and general solicitation in Regulation D private placements sold only to accredited investors, a regulatory exemption for offerings not in excess of $50 million, and the much-touted crowdfunding exemption. Those changes, however, will require implementation by SEC rulemaking.
The final text of H.R. 3606 is available online at
For my prior post discussing the bill in more detail, see
John M. Baker <JMB@...>
Stradley Ronon Stevens & Young, LLP http://www.stradley.com
1250 Connecticut Avenue, NW, Suite 500
Washington, DC 20036
FundLaw Listowner http://groups.yahoo.com/group/fundlaw