SEC© proposes rule amendments to implement JOBS Act Mandate for Exchange Act Registration

Publisher: Weil, Gotshal & Manges LLP

Last week the SEC© proposed rules to implement Title V and Title VI of the JOBS Act Affecting Exchange Act Registration.

Specifically the SEC© proposed to revise the rules governing exchange act registration, termination of registration, and suspension of reporting under the Securities Exchange Act of 1934 to reflect the new thresholds set forth in the JOBS Act.

Overview of the Proposed Rule Amendments

The proposed amendments would implement the mandate of the JOBS Act by:

• Amending the Exchange Act rules that govern the mechanics relating to registration, termination of registration under Section 12(g) and suspension of reporting obligations under Section 15(d) to reflect the new holder of record thresholds set forth in the JOBS Act.
• Revising the rules to apply the same increased registration, termination of registration and suspension of reporting thresholds for banks and bank holding companies to savings and loan holding companies.
• Applying the definition of “accredited investor” in Rule 501(a) of the Securities Act of 1933 (the Securities Act) to determinations as to which record holders are accredited investors for purposes of Exchange Act Section 12(g)(1).
• Amending the definition of “held of record,” in determining whether an issuer is required to register a class of equity securities pursuant to Exchange Act Section 12(g)(1), to exclude securities that are either:
• Held by persons who received them under an employee compensation plan in transactions exempt from Securities Act registration or that did not involve a “sale”; or in certain circumstances, held by persons who received them in exchange for securities received under an employee compensation plan.
• Proposing a non-exclusive safe harbor under which a person will be deemed to have received the securities pursuant to an “employee compensation plan” that relies on the current definition of “compensatory benefit plan” in Securities Act Rule 701 and the conditions of Rule 701(c)

For full details of the implications of the proposed rule amendments, please access the article here.