Discuss Briefly the Changes Brought by the JOBS Act to Security

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The Answer is The JOBS Act creates a new class of public company and a new category of issuer under federal securities laws called the emerging growth company (EGC).EGC status is often referred to as the IPO on-ram.By qualifying as an EGC,the company is exempt from a broad range of requirements typically imposed on companies pursuing an IPO.The main benefits for qualifying as an EGC are:
• An EGC may submit a confidential draft registration statement with SEC for review by the SEC staff.The registration has to be made public only 21 days after the issuer conducts a "road show," that is,members of the company make a presentation of the offering to the public.This confidential filing allows companies,if they choose to do so,to withdraw a proposed IPO without having to have had to disclose confidential business information.
• An EGC is subject to dramatically reduced IPO communication restrictions in that an EGC may communicate with institutional accredited investors to "test the waters" to see if there is enough interest in its IPO before going forward with it.Previously,this type of communication would have been illegal.This new rule allows an EGC to see if an IPO is advantageous before committing to issue securities.
• An EGC needs only to provide two years of audited financial statements when filing an IPO registration to issue securities,instead of three years of audited financial statements that would have previously been required,and is still required of larger companies that do not qualify as an EGC.
• Frees an EGC from the restriction of the Sarbanes- Oxley Act that prohibits investment banks and research analysts of the same firm from communication with each other.Under the JOBS Act,analysts may publish research reports during an EGC's registration even if the analysts are part of the investment bank underwriting the IPO.
• Allows EGCs to file for registration of securities using a streamlined process and requires less disclosure of financial information than for non-EGC IPOs.The act also exempts EGCs from certain disclosure requirements of executive compensation required of larger firms completing an IPO.

Discuss Briefly the Changes Brought by the JOBS Act to Security

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