Fincher debuts IPO bill

Omits some disclosure requirements

WASHINGTON — A bill that would further streamline and, in certain cases, shorten the initial public offering process for emerging growth companies was introduced Friday by U.S. Rep. Stephen Fincher.

The bill by the West Tennessee Republican and Maryland Democrat John Delaney would modify U.S. Securities and Exchange Commission regulations and tweak aspects of the Jumpstart Our Business Startups (JOBS) bill signed into law by President Barack Obama in 2012. Many of the JOBS bill’s major provisions came from legislation Fincher, a member of the Financial Services Committee, introduced.

“Our country is in dire need of good-paying jobs. Congress needs to be doing all that it can to encourage a healthy, job-creating economy,” Fincher said in a statement. “With this bill, further improvements to the IPO on-ramp

will allow small emerging growth companies to continue expanding, leading to more, quality American jobs.”

The JOBS bill exempts emerging growth companies from certain disclosure, auditing, and reporting requirements. It defines an emerging growth company as an issuer of securities with less than $1 billion in annual revenues, and following an initial offering of securities, less than $700 million in publicly traded shares.

It also would allow a business to retain the emerging growth company designation until its gross revenues or publicly traded share volume exceed those levels, or five years after an initial public offering of stock, whichever comes earlier. A provision Fincher placed in the earlier bill exempts emerging growth companies from a requirement that they calculate the ratio of all employees’ compensation to the companies’ CEO compensation, and disclose the result.

The Consumer Federation of America called the JOBS bill “an indiscriminate and ideologically driven dismantling of investor protections, not a genuine solution to the issues of capital access for small companies.”

The bill Fincher introduced Friday would amend the JOBS bill to require the SEC to revise disclosure requirements and allow an issuer to omit financial information now required for initial public offerings under certain circumstances. It also permits the issuer of subsequent securities, within a year of the initial offering, to file a registration statement publicly with the SEC “not later than two days before” the company issues the securities.