JOBS Act Signed: Ready, Set, Crowdfund!
On Thursday afternoon, President Obama signed the JOBS Act and it was off to the races for law firms as a new wave of memos bombarded the airwaves that night (we continue to post them in our "JOBS Act" Practice Area). There was a wave of other activity too - many crowdfunding services began (as will be covered in a future blog) and some regulatory activity as discussed below.
In addition, here is just a smattering of JOBS Act coverage in the press over the past week:
- DealBook's "JOBS Act Jeopardizes Safety Net for Investors"
- DealBook's "From Congress, a Law Befitting a Sausage Factory"
- Keith Bishop's "Crowdfunding - There Will Be Investor Losses"
- D&O Diary's "The Impact of the JOBS Act on D&O Liability"
- Keith Bishop's "NASAA Slams The JOBS Act, But Have The States Really Been Handcuffed?"
- Huffington Post's "Obama JOBS Act Leaves Labor Fuming In Democratic Feud"
- Reuter's "Analysis: Jobs Act doesn't mean Wild West for companies"
Corp Fin Issues Confidential Filing Guidance for Emerging Growth Companies
On Thursday, Corp Fin announced these procedures by which emerging growth companies can furnish a confidential IPO registration statement to the Staff. Section 106 of the JOBS Act provides that an EGC may submit its IPO registration statement to the Corp Fin Staff in draft form for confidential review - conditioned on the furnishing of the confidential submission and all amendments publicly with the SEC no later than 21 days prior to the date the company first conducts a road show for its IPO. Here's more about this guidance culled from this O'Melveny & Myers memo:
Under this guidance, one copy of the draft registration statement should be sent to the following address:
Draft Registration Statement
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
The Division also announced the following with regard to the submission of draft registration statements for IPOs of emerging growth companies:
- the submission should include a transmittal letter confirming the issuer's status as an emerging growth company;
- the draft registration statement should be submitted either as a text-searchable PDF file supplied on a CD/DVD or, alternatively, on paper (it may not be stapled or bound if submitted on paper); and
- there is no requirement to provide a registration fee at the time a confidential submission is made.
Following its receipt of a confidential submission, the Division will contact the emerging growth company to confirm receipt of the submission and to advise it of the office assigned to review the submission.
Emerging growth companies with questions regarding the draft registration statement submission and review process should call (202) 551-5867.
- Confidential Submissions by Foreign Private Issuers - In addition to the confidential submission process for emerging growth companies, the Division has long had a confidential submission process for certain foreign private issuers. This process is described in our Client Alert here. In its guidance, the Division announced that, going forward, any foreign private issuer that is permitted to submit a draft registration statement (either as an emerging growth company or under the Division's foreign private issuer confidential submission policy) must now submit that draft registration statement in the same format and to the same address discussed above. In connection with this requirement, foreign private issuers may no longer use the e-mail address that the Division had provided for confidential submissions.
- Application of Section 5 to Confidential Submissions - The Division took the opportunity in the guidance to make clear that the confidential submission of a draft registration statement is not a public filing. Accordingly, a registration statement submitted through this process is not considered "filed" for purposes of Section 5 of the Securities Act.
JOBS Act and General Solicitation: 14 Law Firm White Paper
Also on Thursday, 14 law firms joined together to issue this white paper to address questions about private offerings during the transition period until the SEC adopts the required revisions to Rule 144A and Rule 506 under Regulation D. Under the JOBS Act, the SEC has 90 days - by July 4th - to eliminate certain existing prohibitions on general solicitation or general advertising. As noted in this Morrison & Foerster memo, the white paper "concludes that, until the SEC adopts final rules as directed by Title II of the JOBS Act, market participants relying on the Rule 506 and Rule 144A safe harbors will generally continue to implement customary procedures for these offerings. The report also concludes that market participants will continue to satisfy conditions of applicable safe harbors such as Securities Act Rules 135c, 152 and 155, as well as comply with applicable SEC and staff guidance regarding the integration of concurrent private and public offerings."
- Broc Romanek