amend its Rule 12g5-1 definition of “held of record” to reflect this amendment to the statute. The SEC also is directed to adopt safe harbour rules for issuers to follow in determining whether holders of their securities received the securities pursuant to “an employee compensation plan in transactions that were exempt from the registration requirements of section 5 of the Securities Act of 1933,” and securities sold in exempt crowdfunding offerings will also not be included in determining whether registration is required under section 12(g). On April 11 2012, the Division of Corporation Finance


issued Frequently Asked Questions on Changes to the Requirements for Exchange Act Registration and Deregistration, which confirmed that the Title V and Title VI provisions raising the Exchange Act registration/deregistration thresholds were, for the most part, immediately effective, thereby providing issuers with the ability to avoid registration in 2012 and going forward, and, specifically with regard to bank holding companies, to terminate their registration/reporting obligation.8 In Frequently Asked Question 4, the SEC noted that if


a bank holding company with a class of equity securities held of record by less than 1,200 persons as of the first day of the current fiscal year has a registration statement that is updated during the current fiscal year pursuant to Securities Act section 10(a)(3), but under which no sales have been made during the current fiscal year, then the bank holding company may be eligible to seek no-action relief to suspend its section 15(d) reporting obligation. The Staff has now been granting these no-action letters.9 As mentioned above, section 503 of the JOBS Act


requires the SEC to revise the definition of “held of record” to exclude, from the section 12(g)(1) holder of record calculation, 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; however, the SEC has not yet proposed or adopted any implementing rules. In Frequently Asked Question 5, the SEC noted that an issuer (including a bank holding company) may exclude persons who received securities pursuant to an employee compensation plan in Securities Act-exempt transactions, whether or not the person is a current employee of the issuer. While section 503 of the JOBS Act directs the Commission to adopt “safe harbor provisions that issuers can follow when determining whether holders of their securities received the securities pursuant to an employee compensation plan in transactions that were exempt from the registration requirements of section 5 of the Securities Act of 1933,” in the SEC’s view the lack of a safe harbour does not affect the application of Exchange Act section 12(g)(5).


62 JOBS Act Quick Start


Required study The SEC was required to examine its authority to enforce Rule 12g5-1 to determine if new enforcement tools are required to enforce the anti-evasion provision contained in (b)(3) of the rule, and to provide recommendation to Congress within 120 days of the enactment of the JOBS Act. On October 16 2012, the SEC staff published the results of this mandated study, concluding that the statutes, rules and procedures as currently formulated provide the Division of Enforcement with sufficient tools to investigate and bring a case for section 12(g) violations based on section 12g5-1(b)(3).10


Treatment of savings and loan holding companies On November 28 2012, Representatives Steve Womack (R-Ark) and Jim Himes (D-Conn) asked former SEC chairman Schapiro to extend to savings and loan holding companies (SLHCs) the benefits of the JOBS Act increase in the section 12(g) registration threshold from 500 to 2,000 for banks and bank holding companies. Similarly, the Congressmen believed that JOBS Act-mandated increase in the deregistration threshold for banks and bank holding companies from 300 to 1,200 should also be made available to SLHCs. They noted that, as sponsors of the original bill, they had not intended to treat SLHCs differently from banks and bank holding companies. While the Title V and VI changes were effective on enactment, the letter stated the hope that the SEC, when it updated its rules to reflect JOBS Act changes, would treat SLHCs in the same manner as bank holding companies.


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