Yesterday President Obama signed into law the Jumpstart Our Business Startups Act (the “JOBS Act” or the “Act”). The JOBS Act’s stated purpose is to increase job creation and economic growth by improving access to public capital markets for emerging growth companies. The JOBS Act relaxes the disclosure requirements for certain companies going public, provides alternative ways for private companies to raise capital and allows some companies to stay private longer.
Immediate and Significant Reduction in Regulatory Burden for Emerging Growth Companies – IPO Process and Exchange Act Reporting
The JOBS Act relaxes the initial public offering (“IPO”) procedural process for “Emerging Growth Companies” (“EGCs”) (as defined below) and provides them with a phase-in period for compliance with certain Securities and Exchange Commission (the “SEC”) requirements. In addition, EGCs may capitalize on scaled-back disclosure requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The provisions related to EGCs in the Act are effective immediately.
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