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From Securities Regulation Daily, December 4, 2015

President signs FAST Act with its securities law changes

By Mark S. Nelson, J.D.

President Obama has signed the Fixing America’s Surface Transportation (FAST) Act. The FAST Act provides a longer term solution to highway funding, reauthorizes the Export-Import Bank, and makes significant changes to federal securities laws that would ease requirements for emerging growth companies, fix gaps in existing securities laws, and push the SEC to review outmoded rules.

The president’s press secretary issued a statement confirming that the president had signed the bill into law. Earlier, the president praised the bipartisan effort by legislators to get the FAST Act through both chambers.

“This bill is not perfect, but it is a commonsense compromise, and an important first step in the right direction,” said President Obama. “I look forward to signing this bill right away, so that we can put Americans to work rebuilding our crumbling roads, bridges, and transit systems, reauthorize the Export-Import Bank that helps our companies compete around the world, and give local and state governments and employers the certainty they need to invest and hire for the long term.”

The FAST Actapproved by the House (359-65) within days of its debut, offers significant relief to emerging growth companies and others in the securities and commodities worlds. The Senate approved the measure by a vote of 83-16 soon after the House finished its work. Notable “No” votes in the Senate included presidential contenders Sen. Ted Cruz (R-Texas), Sen. Rand Paul (R-Ky), and Sen. Marco Rubio (R-Fla), plus Senate Banking Committee Chairman Richard C. Shelby (R-Ala) and Sen. Elizabeth Warren (D-Mass). Senator Bernard Sanders (I-Vt), who is running for president as a Democrat, did not vote.

FAST Act summary. Division G of the FAST Act contains the securities law titles, including:

  • JOBS Act tweaks—(1) Amends Securities Act Section 6(e)(1) to shorten the emerging growth company public filing period before a road show from 21 to 15 days; (2) amends Securities Act Section 6(e)(1) to extend EGC status to the earliest of the firm’s IPO or one-year after losing EGC status; and (3) allows for simplified EGC disclosures of historical financial data under Regulation S-X (See Title LXXI, Sections 71001-71003).
  • Forms, registrations, old rules—(1) Permits summary pages on Form 10-K, if the filing includes cross-references (e.g., electronic links) to related information in the Form 10-K (Title LXXII, Section 72001); (2) requires the SEC to revise and study the need for additional updates to Regulation S-K (Title LXXII, Sections 72002 and 72003); (3) directs the SEC to revise Form S-1 to allow smaller reporting companies to partake of forward incorporation by reference (Title LXXXIV, Section 84001); and (4) amends Exchange Act Section 12(g) to update the registration threshold for savings and loan holding companies (Title LXXXV, Section 85001).
  • SBICs—Amends the Investment Advisers Act to clarify the role of advisers to small business investment companies and also the role of venture capital funds (Title LXXIV, Sections 74001-74003).
  • Private resales—Revises Securities Act Section 4 to close a gap in current laws in order to allow the private resale of securities held by private companies’ employees (Title LXXVI, Section 76001).
  • Swaps—Updates the Commodity Exchange Act and the Exchange Act to clarify that the sharing of swaps data with foreign regulators requires a confidentiality agreement, not an indemnity agreement (Title LXXXVI, Section 86001).

Spending bill looms. The House and Senate also must soon pass a government funding bill that may include securities and banking riders. President Obama’s statement called on Congress to finish its work on the omnibus spending bill. “Congress should pass a complete budget and avoid a government shutdown,” said the president.

House leaders said yesterday that a bill could be ready by the December 11 deadline or a few days later. The Financial Regulatory Improvement Act of 2015 (S. 1484), sponsored by Sen. Shelby, and tacked on to the chamber’s spending bill (S. 1910) earlier this year, contains many banking and a few securities provisions.

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