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News April 16, 2012 Issue

SEC Issues JOBS Act FAQs

Clearly, many questions are being asked about the new JOBS Act.

Signed into law on April 5, the Jumpstart Our Business Startups (JOBS) Act removes several longstanding impediments to capital raising under the securities laws. Gone are the prohibitions on general solicitation and general advertising in private offerings made to accredited investors. "Crowdfunding" internet solicitations are now allowed. Research analysts may once again "cheerlead" for the IPOs of their investment banks.

The JOBS Act changes the capital raising game for smaller business players. However, to get the bill passed, some iís were not dotted, and some tís were left uncrossed. Critics of the JOBS Act argue that haste has created problems that must be addressed. They say the JOBS Act presents a number of ambiguities, conflicts, and lacks easily included investor protections.

The SEC has heard the furor, and is getting out in front to help issuers, investment banks, and others navigate the new law.

The SECís Division of Corporation Finance has devoted space on its web page to JOBS Act resources. There, the SEC offers not one, not two, but THREE separate FAQs related to the JOBS Act.

On April 10, the SEC released Frequently Asked Questions on Confidential Submission Process for Emerging Growth Companies.

On April 11, the SEC released Frequently Asked Questions on Changes to the Requirements for Exchange Act Registration and Deregistration.

And on April 16, the SEC issued Frequently Asked questions of General Applicability on Title I of the JOBS Act.

On the day the JOBS Act was signed into law, the SEC released guidance regarding the confidential submission of draft registration statements under the JOBS Act.

Check out the FAQs to learn:

  • Which registration statements are eligible to be submitted on a confidential basis;
  • How foreign private issuers access the confidential submission process;
  • SEC expectations for the content of a draft registration statement;
  • Pre-road show requirements;
  • Whether an issuer already in the registration process can withdraw and avail itself of JOBS Act provisions;
  • How an issuer qualifies as an emerging growth company;

and much more.