Tuesday, March 06, 2012

Senator Schumer Says Senate Will Pass Capital Formation Legislation Similar to House JOBS Act

During Senate Banking Committee hearings on capital formation legislation today, Senator Charles Schumer said that the Senate would soon be bundling together pieces of legislation on crowdfunding, IPO on ramp and other measures to create bi-partisan omnibus legislation similar to the JOBS Act expected to pass the House this week. He said that the Senate version of the legislation may go further than the House legislation. Senator Schumer also noted that the Senate will pass capital formation legislation, it is only a question of when such legislation will be passed.

Senator Schumer, along with the Senator Pat Toomey (R-PA) has introduced IPO on ramp legislation, S 1933, similar to the House legislation, that would make it easier for small and medium-sized companies to access capital through public markets so they can expand and create jobs. The legislation, co-sponsored by Senators Mark Warner (D-Va.) and Mike Crapo (R-Idaho), would create an on-ramp to public markets for a new category of issuers, called emerging growth companies that have less than $1 billion in annual revenues at the time they register with the SEC and less than $700 million in publicly-traded shares after the IPO.

The Senate legislation creates a transitional on-ramp status for these companies to encourage them to go public. The on-ramp period would last as many as five years, or until a company reaches $1 billion in annual revenue or $700 million in publicly-traded shares. Full compliance with certain obligations would be phased in during that period.

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