The Jumpstart Our Business Startups (JOBS) Act became law in April 2012. Its major provisions were to:
- Create an IPO “on-ramp” for a new class of registrants called “emerging growth companies” (EGCs)
- Permit general solicitation in offerings under Rule 506 and Rule 144A, provided sales are made only to persons reasonably believed to be qualified
- Create an offering exemption for crowdfunding transactions
- Create an exemption for offerings not exceeding US$50 million within the prior 12-month period
- Raise thresholds triggering registration obligations under the Exchange Act
Some of the initiatives under the JOBS Act have been suggested by market participants for many years in light of the significant changes to the markets and the ways people and companies communicate information. In key ways, Title I of the JOBS Act represents the latest stage in the evolution of the SEC’s regulation of issuers according to their “categories”—meaning, generally, regulations scaled to the nature and size of an issuer’s business, offerings and the trading markets for its securities.