SEC Proposes Amendments to Implement JOBS Act Mandate for Exchange Act Registration Requirements
The SEC approved a proposal that would revise rules regarding thresholds for issuer registration, termination of registration, and suspension of reporting under Exchange Act Section 12(g) ("Registration of securities by issuer; exemptions").
The proposal would implement the JOBS Act by:
- amending Exchange Act Rules 12g-1 through 12g-4 and 12h-3 which govern the procedures relating to issuer registration, termination of registration under Section 12(g), and suspension of reporting obligations under Exchange Act Section 15(d) ("Registration and regulation of brokers and dealers") to reflect the new thresholds established by the JOBS Act;
- revising the rules so that savings and loan holding companies are treated in a similar manner to banks and bank holding companies for the purposes of registration, termination of registration, or suspension of their Exchange Act reporting obligations; and
- applying the definition of "accredited investor" in Securities Act Rule 501(a) to determinations as to which record holders are accredited investors for purposes of Exchange Act Section 12(g)(1). The accredited investor determination would be made as of the last day of the fiscal year.
The proposal would also amend the definition of "held of record" to provide that when determining whether an issuer is required to register a class of equity securities with the SEC under the Exchange Act Section 12(g)(1), an issuer may exclude securities that are: (i) held by persons who received them under an employee compensation plan in transactions exempt from the registration requirements of Securities Act Section 5 ("Prohibitions relating to interstate commerce and the mails") or (ii) held by persons who received them in exchange for securities received under an employee compensation plan in certain circumstances.
Furthermore, the SEC proposed a non-exclusive safe harbor under which a person will be deemed to have received securities under an employee compensation plan meeting the conditions of Securities Act Rule 701(c).