The United States House of Representatives passed the bipartisan JOBS and Investor Confidence Act of 2018, which is often referred to as JOBS Act 3.0. The bill is comprised of 32 individual pieces of legislation that have passed the Financial Services Committee or the House this Congress with broad bipartisan support. You can find a description of the individual pieces of legislation here.
The House legislation was passed as House Amendment to S. 488 (previously known as the Encouraging Employee Ownership Act), under suspension of the rules. The bill passed by a vote of vote of 406-4.
Senate Majority Leader Mitch McConnell has reportedly committed to bring the bill up for a vote.
Some of the highlights of the legislation follow.
The Promoting Transparent Standards for Corporate Insiders Act requires, among other things, the SEC to carry out a study of whether Rule 10b5–1 should be amended to limit the ability of issuers and insiders to adopt a certain 10b5-1 plans only during issuer-adopted trading windows and limit the ability of issuers and insiders to adopt multiple, overlapping trading plans. In addition, after the completion of the study, the SEC is required to revise Rule 10b5–1 consistent with the results of the study.
The Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act of 2017 amends the Securities and Exchange Act to provide a broad exemption from registration as a broker dealer for certain investment bankers selling privately held companies.
The Fair Investment Opportunities for Professional Experts Act changes the definition of accredited investor to include any natural person who is currently licensed or registered as a broker or investment adviser by the SEC or FINRA or any other natural person the SEC determines, by regulation, to have demonstrable education or job experience to qualify such person as having professional knowledge of a subject related to a particular investment, and whose education or job experience is verified by FINRA.
The Modernizing Disclosures for Investors Act requires the SEC to provide a report to Congress with a cost-benefit analysis of EGCs’ use of SEC Form 10-Q, including the costs and benefits to investors and other market participants of the current requirements for reporting on Form 10-Q, as well as the expected impact of the use of alternative formats of quarterly reporting for EGCs. The bill also directs the SEC to report to Congress with recommendations for decreasing costs, increasing transparency, and increasing efficiency of quarterly financial reporting by EGCs.