Congress Passes JOBS Act to Expand Access to Capital Markets

In order to spur job creation and economic growth, Congress recently passed legislation that fundamentally reforms the requirements for accessing capital markets in the United States. On April 5, 2012, President Obama signed the Jumpstart Our Business Startups (JOBS) Act, which Congress passed with broad bipartisan support. This legislation seeks to expand access to capital markets by making initial public offerings more attractive to “emerging growth companies” and expanding the ability of companies to raise capital in private and limited public offerings without registration with the Securities and Exchange Commission (SEC).

Encouraging Emerging Growth Companies to Access Public Capital Markets

The JOBS Act reforms the initial public offering (IPO) process for “emerging growth companies,” which the Act broadly defines as any issuer that had less than $1 billion in revenues in its last fiscal year. Companies that completed an IPO on or before December 8, 2011 would not qualify as an emerging growth company. The JOBS Act eases the regulatory burdens of the IPO process for an emerging growth company by...

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