Financial Services Bulletin: JOBS Act and New Releases from the CFTC, Fed, FDIC, FSOC, OCC, and SEC


JOBS Act Signed Into Law

On Thursday, April 5, 2012, President Obama signed the Jumpstart Our Business Startups Act (the "JOBS Act") into law.  The JOBS Act's stated purpose is to spur job creation and economic growth by improving access to capital for emerging growth companies by making some of the most significant changes to the U.S. securities law landscape in over a generation.  Some of the more significant changes implemented by the JOBS Act include:
  • Relaxing the 500 stockholder threshold for required registration under the Securities and Exchange Act of 1934;

  • Providing for a streamlined IPO process and reduced securities compliance requirements for a new category of "Emerging Growth Companies";

  • Permitting general solicitation for private offerings only to "accredited investors";

  • Expanding the amount of securities issued under Regulation A from $5 million to $50 million; and

  • Significantly expanding exemptions for unregistered offerings of securities by private companies by creating a new "crowdfunding" exemption.

Read the full Perkins Coie update

Federal Agencies Clarify Effective Dates for Section 716 of the Dodd-Frank Act

On Friday, March 30, 2012, the Board of Governors of the Federal Reserve System (the "Fed"), the Federal Deposit Insurance Company (the "FDIC"), and the Office of the Comptroller of the Currency (the "OCC") issued guidance clarifying that the effective date of Section 716 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), the so-called Swaps Pushout provision, will be July 16, 2013.  Section 716 prohibits certain types of Federal assistance, such as discount window lending and deposit insurance, for certain uses to a swaps entity, subject to specified exceptions, with respect to its swap, security-based swap, or other activity.

Read the Fed press release

Read the FDIC press release

Read the OCC press release

The Fed Amends Previously Proposed Financial Activities Rule

On Monday, April 2, 2012, the Fed requested comment on proposed amendments to the agency's Notice of Proposed Rulemaking issued February 11, 2011, to establish requirements for determining whether a company is "predominantly engaged in financial activities."  Under Title 1 of the Dodd-Frank Act, a company generally can be designated for Fed supervision by the Financial Stability Oversight Council only if 85 percent or more of the company's revenues or assets are related to activities that are financial in nature under the Bank Holding Company Act.  Some commenters to the February 2011 Notice asked whether conditions imposed on the conduct of financial activities by the Bank Holding Company Act and the Fed's regulations should be considered in defining financial activities for purposes of Title I.  In these proposed amendments, the Fed seeks to clarify the activities that are financial for purposes of Title I.

Read the Fed press release 

The CFTC Issues Final Swap Reporting Rule

On Tuesday, April 3, 2012, the Commodity Futures Trading Commission (the "CFTC") adopted regulations to implement certain provisions of Title VII of the Dodd-Frank Act.  These regulations set forth reporting, recordkeeping, and daily trading records requirements for swap dealers ("SDs") and major swap participants ("MSPs").  These regulations also set forth certain duties imposed upon SDs and MSPs registered with the CFTC with regard to risk management procedures, monitoring of trading to prevent violations of applicable position limits, diligent supervision, business continuity and disaster recovery, disclosure and the ability of regulators to obtain general information, and antitrust considerations.

In addition, these regulations establish conflicts-of-interest requirements for SDs, MSPs, futures commission merchants ("FCMs"), and introducing brokers with regard to firewalls between research and trading and between clearing and trading.  Finally, these regulations also require each FCM, SD, and MSP to designate a chief compliance officer, prescribe qualifications and duties of the chief compliance officer, and require that the chief compliance officer prepare, certify, and furnish to the CFTC an annual report containing an assessment of the registrant's compliance activities.

Read the CFTC press release 

The FSOC Approves Final Rule Regarding the Designation of Systemically Important Nonbank Financial Companies

On Tuesday, April 3, 2012, the Financial Stability Oversight Council (the "FSOC") issued a final rule and interpretive guidance pursuant to Section 113 of the Dodd-Frank Act.  Section 113 of the Dodd-Frank Act authorizes the FSOC to require a nonbank financial company to be supervised by the Fed and be subject to prudential standards if the FSOC determines that material financial distress at the company—or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the company—could pose a threat to U.S. financial stability.  The rule and interpretive guidance detail the analysis and process the FSOC will use when determining which nonbank financial companies should be subject to the enhanced standards and Fed supervision.

Read the SEC press release 

The SEC Announces the Members of the Investor Advisory Committee

On Monday, April 9, 2012, the Securities and Exchange Commission (the "SEC") announced the formation of a new Investor Advisory Committee required by Section 911 of the Dodd-Frank Act.  The 21-member committee replaces the advisory committee that was disbanded after the Dodd-Frank Act became law.  Section 911 established the new committee to advise the SEC on regulatory priorities, the regulation of securities products, trading strategies, fee structures, the effectiveness of disclosure, initiatives to protect investor interests and to promote investor confidence, and the integrity of the securities marketplace.  The Dodd-Frank Act authorizes the committee to submit findings and recommendations for review and consideration by the SEC.

Read the SEC press release 

The SEC Seeks Public Comment Prior to JOBS Act Rulemaking

On Wednesday, April 11, 2012, the SEC announced it will begin accepting comments from the public as the agency sets out to make rules required under the recently-signed JOBS Act.  The SEC is generally required by law to establish a public comment period at the time it proposes rules or rule amendments.  However, similar to the Commission’s action with the Dodd-Frank Act, the SEC is providing a platform for the public to comment before rules or amendments are proposed under the JOBS Act.

The SEC has set up a webpage for public submission of comments on the JOBS Act.  The SEC will post all submissions on the SEC's Internet website.  All submissions received will be posted without change; including retaining any personal identifying information.  Official comments on particular rulemaking proposals should still be submitted during the official comment period through the Commission's website as described in the relevant notice of the proposal published in the Federal Register.

Read the SEC press release 

See the SEC web page for JOBS Act comments 

© 2012 Perkins Coie LLP