Monday, May 07, 2012

Corp Fin Issues Additional Guidance on JOBS Act Title I

The SEC’s Division of Corporation Finance on May 3, 2012 issued FAQs 18-41 for companies planning to use Title I of the Jumpstart Our Business Startups (JOBS) Act. The JOBS Act became law April 5, 2012. JOBS Act Title I contains scaled disclosure obligations for emerging growth companies. Some highlights from these new FAQs include:
·        FAQ 19 — An ABS issuer would not qualify as an emerging growth company.
·        FAQ 20 — An investment company registered under the Investment Company Act does not qualify as an emerging growth company.
·        FAQ 21 — Business Development Companies (BDCs) may qualify as emerging growth companies. BDCs fit within the context of the JOBS Act since these companies invest in startup and emerging growth companies, and already must comply with disclosure requirements from which JOBS Act Title I provides exemptions.
·        FAQ 24 — An issuer that becomes the successor to its predecessor’s Exchange Act registration and reporting obligations under Exchange Act Rules 12g-3 and 15d-5 does not qualify as an emerging growth company if the predecessor’s first sale of common equity securities under an effective registration statement occurred on or before December 8, 2011.
·        FAQ 25 — SEC staff comment letters and issuer replies pertaining to an emerging growth company’s confidential draft submissions will be publicly released on EDGAR no earlier than 20 business days after its registration becomes effective. Due to the submission procedure for confidential draft submissions, the staff will require emerging growth companies to resubmit their comment letter replies to staff comments on confidential draft submissions as document type “CORRESP” when they first file their registration statements on EDGAR.
·        FAQ 28 — Emerging growth companies must comply with XBRL requirements.
·        FAQ 32 — An emerging growth company that has conducted its first sale of common equity securities under an effective registration statement, and has lost its emerging growth company status under the JOBS Act disqualification provisions, may not later regain emerging growth company status.
Corp Fin published FAQs1-17 on April 16, 2012. The full set of JOBS Act Title I FAQs can be found here.