Bankers and financial institution executives should note that the Securities and Exchange Commission has released guidance and other information regarding the Jumpstart Our Business Startups Act of 2012, or JOBS Act, that became law a few weeks ago.
The JOBS makes significant changes to how banks and other businesses can raise capital. It does this by:
· Easing the IPO process and reporting requirements for emerging growth companies;
· Reducing general solicitation and general advertising restrictions for certain private placements;
· Creating a new $50 million small public offering exemption;
· Creating a “crowdfunding” private placement exemption; and
· Perhaps most importantly, for community banks and bank holding companies, increasing the number of shareholders a private company may have without having to publicly report under the Securities Exchange Act of 1934, including specific thresholds for banks and bank holding companies.
A summary of the JOBS Act is provided here.
The recent SEC guidance and other information is outlined below.Continue Reading...