On April 5, 2012, President Obama signed into law the Jumpstart Our Business Startups Act (the “JOBS Act”) containing important changes to U.S. federal securities laws that should make the U.S. capital markets more appealing for foreign private issuers. The most significant changes of interest to foreign companies are the removal of restrictions on general solicitation or general advertising, and the establishment of a new category of registrant known as an emerging growth company (“EGC”) that does not exclude non-U.S. companies and provides a number of advantages for companies considering an initial public offering of common stock (“IPO”).
This note focuses on the advantages to non-U.S. companies considering accessing the U.S. capital markets either as part of an SEC registered IPO or a Rule 144A private placement transaction. The JOBS Act contains a number of further revisions to U.S. federal securities laws of less importance to foreign issuers, such as establishing the concept of “crowdfunding” for small U.S. domestic issuers, increasing the potential size of the small issues exemption and increasing the registration thresholds for public companies based upon the number of U.S. record holders.
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