This week the SEC appointed Keith F. Higgins as Director of the Division of Corporation Finance. We don’t know him personally but have seen him speak at conferences and observed his leadership of the ABA’s Federal Regulation of Securities Committee. We think he is an energetic and practical securities lawyer that will give the JOBS Act the attention it needs.
Mr. Higgins was a member of an ABA drafting committee which submitted preliminary comments on the JOBS Act to the SEC. We think many would agree with the direction taken, but they were the committee’s views, and not his.
The SEC’s Lona Nallengara and Shelley E. Parratt spoke at a securities law conference on May 2, 2013. According to reports they noted the SEC has established independent teams to work through each anticipated or proposed JOBS Act rulemaking, but they did not provide any firm timetable for when any such rulemakings would be released.
When asked by the Wall Street Journal on the timing of JOBS Act rules, the agency declined to comment on timing, referring to testimony “this past week” from new SEC Chairman Mary Jo White, who said completing the JOBS Act rule-making is a “top” priority.
We’re not sure of what testimony “this past week” the SEC or the Wall Street Journal was referring to. However, this week in testimony to the U.S. House of Representatives Committee on Financial Services this week, Ms. White stated “I believe that the SEC must complete, in as timely and smart a way as possible, the rulemaking mandates contained in both the Dodd-Frank Act and JOBS Act.” However, some press reports infer that during her testimony she indicated her “No. 1 priority” is more investment adviser examinations.
As an aside, how long can it take for a government agency to adopt a rule? We don’t know, but the IRS was authorized to implement IRC Section 336(e) in 1986, which permits an election to treat certain stock transfers as a deemed asset sale, akin to a 338(h)(10) election. The IRS issued final 336(e) regulations last week.
The same Wall Street Journal article referenced above discusses how hedge funds are aggressively preparing marketing campaigns to be ready once the ban on general solicitication is lifted. One hedge fund manager brags that he has already taken out ads in business magazines and discusses the redesign of his web site, which is certainly interesting.
The MoFo Jumpstarter blog notes some legislative developments:
- The House has passed a bill imposing a deadline on the SEC to enact the “Regulation A+” provisions of the JOBS Act.
- A bill has been introduced to amend the Securities Exchange Act of 1934, to make the shareholder threshold for registration of savings and loan holding companies the same as for bank holding companies.
This article notes “Equity crowdfunding as it emerged from the JOBS Act is the new ‘bridge to nowhere.’ It puts big deal procedures and liability on small deals. The expense of complying with crowdfunding, combined with the low issuer maximum that can be raised ($1 million over a trailing 12 month period) will be prohibitive for most issuers.. . . And it won’t create jobs except for plaintiff’s lawyers.” Most of that has been said before, but we like some of the thoughts, and the ultimate utility remains to be seen.