It has been five months since the April 5 passing of the JOBS Act. We have seen the IPO roadmap quickly evolve, as a number of qualifying companies took advantage of reduced disclosure requirements and the option to privately file initial registration statements. Investment banks' research practices are changing too, but regulatory uncertainty and legal worries generally keep research from being published on or around the IPO date. All in, we find recent changes to the IPO process as somewhat positive for the qualifying companies seeking to go public, modestly negative for the investment community, and neutral to the investment banks.
One of the main facets of the JOBS Act was to help companies more easily raise money by making the IPO process less costly and burdensome. Among other reforms, the JOBS Act eliminated many provisions founded in the Sarbanes-Oxley Act of 2002 for “emerging growth companies” with under $1 billion in annual revenue in an effort to reduce disclosure requirements in registration statements. There are seven such provisions: