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Startup in the United States

The Jumpstart Our Business Startups Act (the “JOBS Act”) was enacted on April 5, 2012. Title V and Title VI of the JOBS Act amend Section 12(g) and Section 15(d) of the Exchange Act as follows:

The holders of record threshold for triggering Section 12(g) registration for issuers (other than banks and bank holding companies) has been raised from 500 or more persons to either (1) 2,000 or more persons or (2) 500 or more persons who are not accredited investors.

Banks and bank holding companies, as such term is defined in the Bank Holding Company Act of 1956, will have a Section 12(g) registration obligation as of any fiscal year-end after April 5, 2012 with respect to a class of equity security held of record by 2,000 or more persons. Under Exchange Act Section 12(i), banks do not register their securities or file reports with the Commission. Accordingly, these FAQs relate only to bank holding companies.

The holders of record threshold for Section 12(g) deregistration for banks and bank holding companies has been increased from 300 to 1,200 persons.

The holders of record threshold for the suspension of reporting under Section 15(d) for banks and bank holding companies has been increased from 300 to 1,200 persons.

In calculating the number of holders of record for purposes of determining whether Section 12(g) registration is required with respect to a class of equity security, issuers (including banks and bank holding companies) may exclude persons who received the securities pursuant to an employee compensation plan in transactions exempted from the registration requirements of Section 5 of the Securities Act.

Some issues were raised relating to how these changes affect the requirement of issuers (including bank holding companies) to register a class of equity security under Section 12(g) and the ability of bank holding companies to deregister a class of equity security under Section 12(g) or to suspend a reporting obligation under Section 15(d).

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See Also

  • Growth Company
  • Crowdfunding
  • Holder
  • Bank

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