The SEC recently adopted rules implementing Title V and Title VI of the Jumpstart Our Business Startups Act (the “JOBS Act”) and Title LXXXV of the Fixing America’s Surface Transportation Act (the “FAST Act”). Title V and Title VI of the JOBS Act, in relevant part, amended Sections 12(g) and 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) to adjust the thresholds for registration, termination of registration and suspension of reporting, while Title LXXXV of the FAST Act remedied the omission from the JOBS Act of savings and loan holding companies in the revised thresholds for registration, termination of registration and suspension of reporting. The SEC’s implementing rules under the JOBS Act were originally proposed in December 2014, and the SEC received 11 comments letters that generally supported the proposals. With the adoption of these rule changes, the SEC has completed all rulemaking mandated by the JOBS Act. The amended rules reflect the new, higher registration, termination of registration and suspension of reporting thresholds. The amendments also establish a non-exclusive safe harbor for issuers when determining if securities held by persons who received them pursuant to an employee compensation plan in transactions exempted from the registration requirements of Section 5 of the Securities Act may be excluded when determining whether they are required to register under Exchange Act Section 12(g)(1).
INCREASED THRESHOLDS FOR REGISTRATION AND REPORTING OBLIGATIONS -
Registration of Securities -
When registration is required. Exchange Act Section 12(g), as amended by the JOBS Act and the FAST Act, generally requires that, subject to certain exceptions, an issuer must register a class of equity securities (other than exempted securities) with the SEC if, on the last day of its fiscal year, the issuer has total assets of more than $10 million and the class of equity securities is “held of record” by either (i) 2,000 persons, or (ii) 500 persons who are not accredited investors; or, if the issuer is a bank, a bank holding company (as defined in Section 2 of the Bank Holding Company Act of 1956) or savings and loan holding company (as defined in Section 10 of the Home Owners’ Loan Act), the issuer must register a class of equity securities (other than exempted securities) with the SEC if, on the last day of its fiscal year, the issuer has total assets of more than $10 million and the class of equity securities is “held of record” by 2,000 or more persons.
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