JOBS Act Exemptions to Expire Soon for Emerging Growth Companies
Businesses that went public under the designation of emerging growth companies shortly after the JOBS Act of 2012 was enacted could soon lose their exemptions from the law. The five-year exemptions included in the JOBS Act, which curtails regulations for young companies that raise investor funds and encourages initial public offerings, are set to expire soon. Once the exemptions expire, hundreds of young companies will be subject to various accounting, disclosure and corporate governance requirements foreign to them. One exemption set to go away relates to Section 404(b) of the Sarbanes-Oxley Act. Section 404(b) requires an external auditor to review. Read More.
Topics: Dodd-Frank Act, Emerging Growth Companies, JOBS Act, Jumpstart Our Business Startups Act "JOBS Act", Pay Ratio Disclosure, Sarbanes-Oxley Act "SOX", SEC, Securities and Exchange Commission "SEC"
Senate Bill Gives Sarbanes-Oxley Exemption to Small Banks
Banks holding less than $1 billion in assets could receive an exemption from the auditor attestation requirements of Section 404(b) under the Sarbanes-Oxley Act of 2002. Under S. 1962, the Community Bank Access to Capital Act of 2017, the proposed Senate bill frees smaller banks from the more complicated and expensive reforms under Sarbanes-Oxley. S. 1962 also requires public companies to hire an external auditor to attest to management’s internal controls over financial reporting. The bill’s co-sponsor, Senator Mike Rounds (R-S.D.), stated the proposed measure would promote growth among community banks and help them support their communities. Section 404(b) advocates. Read More.
SEC’s Corp Fin Updates Compliance and Disclosure Interpretations
Staff members of the Securities and Exchange Commission’s (“SEC”) Division of Corporation Finance (“Corp Fin”) recently updated two Compliance and Disclosure Interpretations (“C&DIs”): Fixing America’s Surface Transportation (FAST) Act (Updated Question 1) ; and Securities Act Forms (New Questions 101.04 and 101.05) . Featuring the staff’s interpretations concerning SEC forms, rules and regulations, both updates relate to financial information requirements for emerging growth companies.
SEC Advisory Committee Announces Public Meeting
A public meeting by the Securities and Exchange Commission (“SEC”) Advisory Committee on Small and Emerging Companies (“Committee”) is scheduled for Wednesday, September 13. According to the meeting’s agenda, the Committee will discuss matters concerning rules and regulations impacting small and emerging business under federal securities laws. The meeting will start at 9:30 a.m. ET, and will be hosted in Washington, D.C., at the agency’s headquarters. A live stream of the meeting will be available on SEC.gov.
New PCAOB White Paper Discusses Emerging Growth Companies
A new white paper by the Public Company Accounting Oversight Board (“PCAOB”) features significant observations about emerging growth companies. Published as White Paper on Characteristics of Emerging Growth Companies , the report includes information from recent Securities and Exchange Commission (“SEC”) filings and statistics from third-party vendors as of November 15, 2016. Some of the key observations discuss the emerging growth companies with common equity securities on U.S. exchanges; the percentage of emerging growth companies not listed on an exchange and reported zero revenues and those that disclosed they were shell companies; and the filers that delivered management reports regarding internal control over financial reporting, and those filers. Read More.
Interim Rule Issued for FAST Act Disclosure Requirements
Providing guidance for the implementation of Sections 71003 and 84001 of the Fixing America’s Surface Transportation (FAST) Act, the Securities and Exchange Commission (“SEC”) has issued the Interim Final Rule, Simplification of Disclosure Requirements for Emerging Growth Companies and Forward Incorporation by Reference on Form S-1 for Smaller Reporting Companies. Sections 71003 and 84001 of the FAST Act require the SEC to update Forms S-1 and F-1 to allow emerging growth companies to exclude financial information for certain periods, and amend Form S-1 to allow incorporation by reference for smaller companies. The interim rule will be effective upon its publication. Read More.