[From nobody Fri Dec 2 10:15:50 2011 Received: from p-ess-ironp4.senate.gov ([156.33.195.70]) by mail.turbonet.com (Cactus Mail Server v9.4.0) with ESMTP id KJZ43957 for <lfalen@turbonet.com>; Thu, 01 Dec 2011 15:50:57 -0800 DKIM-Signature: v=1; a=rsa-sha256; c=simple/simple; d=senate.gov; i=newsclips@crapo.senate.gov; q=dns/txt; s=senate-ip; t=1322783457; x=1412034657; h=from:date:subject:message-id:mime-version; bh=Gf/oUAYP/O0SKwvPf/usOMjHlT/fCU4rDFF8fjwV0Ik=; b=mcpW7na0YiPLnJ+q5miVoP6RyIKMde1EnB0I7TOXBlL4XZMOTbCI7sLB sTL0+UXci0GrNwX0gj4mBbPrd/34gDl/8jXjscuXuOZWfbDHk9JbhA+uS bFCs9yLQ+CzFbDYpXB06FbqzssaJ0/LVFTIJO2YmAaUwECsehaFcii8U+ 4=; X-IronPort-AV: E=Sophos;i="4.71,281,1320642000"; d="scan'208,217";a="9888802" Received: from hubtransportpcf.senate.gov (HELO SHARED-WSH-HT04.shared.ussenate.us) ([156.33.248.20]) by p-ess-ironp4.senate.gov with ESMTP/TLS/RC4-MD5; 01 Dec 2011 18:50:57 -0500 Received: from SENATE-EX05.senate.ussenate.us ([156.33.248.44]) by SHARED-WSH-HT04.shared.ussenate.us ([156.33.248.20]) with mapi; Thu, 1 Dec 2011 18:50:56 -0500 From: "Crapo News Release (Crapo)" <newsclips@crapo.senate.gov> Date: Thu, 1 Dec 2011 18:50:55 -0500 Subject: [Spam 5.41] Bipartisan Plan Makes it Easier for Growing Firms to Go Public Thread-Topic: Bipartisan Plan Makes it Easier for Growing Firms to Go Public Thread-Index: AcywhBDO5JB+PggkRdOWWSKw45iRMA== Message-ID: <EF22B21D8CEAA148B030C28A9708DB9E02DE5213CF@SENATE-EX05.senate.ussenate.us> Accept-Language: en-US Content-Language: en-US X-MS-Has-Attach: X-MS-TNEF-Correlator: acceptlanguage: en-US Content-Type: multipart/alternative; boundary="_000_EF22B21D8CEAA148B030C28A9708DB9E02DE5213CFSENATEEX05sen_" MIME-Version: 1.0 --_000_EF22B21D8CEAA148B030C28A9708DB9E02DE5213CFSENATEEX05sen_ Content-Type: text/plain; charset="us-ascii" Content-Transfer-Encoding: quoted-printable FOR IMMEDIATE RELEASE Contact: Crapo (208) 344= -1108 December 1, 2011 = Schumer (202) 224-2939 = Toomey (202) 224-0437 = Warner (202) 224-2023 CRAPO, SCHUMER, TOOMEY, WARNER ANNOUNCE BIPARTISAN PLAN TO MAKE IT EASIER F= OR GROWING FIRMS TO GO PUBLIC Package of Reforms Would Spur Job Creation by Boosting Smaller Companies' A= ccess to Capital WASHINGTON, D.C. - U.S. Senators Mike Crapo (R-Idaho), Charles Schumer (D-N= ew York), Pat Toomey (R-Pennsylvania) and Mark Warner (D-Virginia) today an= nounced a bipartisan plan to make it easier for growing firms to go public = so they can expand and create jobs. The proposal would make it easier for s= mall and medium-sized companies to access capital through public markets. Studies show that more than 90 percent of job growth occurs after companies= go public, but fewer small and medium-sized companies are taking this step= in recent years, often citing the administrative and compliance burdens as= the main obstacles to going public. The bipartisan bill, known as the Reop= ening American Capital Markets to Emerging Growth Companies Act of 2011, wo= uld reduce these hurdles of an initial public offering by phasing in many o= f the costliest obligations over time while maintaining key investor protec= tions. Crapo said: "This on-ramp proposal will make it easier for young, innovativ= e companies to access the public markets and ultimately the capital they ne= ed to grow and create jobs. It will reverse the decline we've seen in IPOs= over the last decade by temporarily scaling back certain regulatory requir= ements imposed by the Sarbanes Oxley Act and the Dodd Frank Act, positively= impacting job creation in the United States. The IPO Task Force estimates= that the average cost for a company to go public is $2.5 million, and the = annual cost to stay public is $1.5 million." Schumer said: "During difficult economic times, it is critical that we give= growing innovators the breathing room that they need to access public mark= ets. The vast majority of job creation occurs after companies go public so = it makes sense to make the IPO process easier for emerging firms. This is a= commonsense set of reforms that can bridge the partisan divide and have a = real impact on job creation." Toomey said: "In this struggling economy, Congress should do everything it = can to make it easier for small businesses to grow and create new jobs. Thi= s legislation will make it easier for firms to go public and in turn, creat= e many more jobs. This legislation offers a bipartisan path for Congress to= help get our economy moving again." Warner said: "Encouraging more companies to go public instead of remaining = private or waiting to be acquired will increase the vibrancy and competitiv= eness of the American economy. It also will encourage the sort of innovatio= n and entrepreneurial activity that creates jobs and can help to turn this = economy around. Smarter regulation can improve our markets and ultimately m= ake them more attractive for both investors and entrepreneurs, and this leg= islation will move us closer to that." In a recent survey conducted by NASDAQ and the National Venture Capital Ass= ociation, 86 percent of chief executive officers cited "accounting and comp= liance costs" and 80 percent cited "regulatory risks" as key concerns about= going public. With companies taking longer than ever to go public - on ave= rage 9.4 years, compared to fewer than five years in the 1980s - rapid expa= nsion and job growth is being delayed, and the senators' legislation aims t= o accelerate the expansion and job growth made possible by accessing public= markets. The senators' bill would establish a new category of issuers, called "emerg= ing growth companies" that have less than $1 billion in annual revenues at = the time they register with the U.S. Securities and Exchange Commission and= less than $700 million in publicly-traded shares after the IPO. The legisl= ation creates a transitional "on-ramp" status for these companies to encour= age them to go public. The "on-ramp" period would last as many as five year= s, or until a company reaches $1 billion in annual revenue or $700 million = in publicly-traded shares. Full compliance with certain obligations would b= e phased in during that period. A full summary of the Senators' proposal appears below. Reopening American Capital Markets to Emerging Growth Companies Act of 2011= Sponsored By Senators Schumer, Toomey, Warner and Crapo BACKGROUND SUMMARY 1. Create a new category of "Emerging Growth Companies." The bill woul= d establish a new category of issuers, called "emerging growth companies," = who have less than $1 billion in annual revenues at the time they register = with the SEC and less than $700 million in public float after the IPO. Thes= e companies will have as many as five years (or until they reach $1 billion= in annual revenue or $700 million in public float) to comply with certain = regulatory requirements. "On-Ramp" status is designed to be temporary and t= ransitional, encouraging small and medium-sized companies to go public but = ensuring they transition to full compliance over time or as they grow. Only= an estimated 11-13 percent of companies and 3 percent of total market capi= talization would qualify for "on ramp" status if these provisions were in e= ffect today. 2. Provide an "On-Ramp" for Emerging Growth Companies by Leveraging Ex= isting Scaled Regulation Approach. The scaled regulations are limited to th= ose areas of compliance that are high cost and which do not compromise core= investor protections or disclosures, and all of them build on existing sca= led regulations. These include: a. Section 404(b) of Sarbanes-Oxley. This is the requirement that publ= ic companies pay an outside auditor, in addition to auditing the financial = statements, to attest to the company's internal controls and procedures. SE= C studies have shown that compliance with Sarbanes Oxley costs companies mo= re than $2 million per year. All companies with market capitalization of le= ss than $75 million are already exempt, because lawmakers and the SEC recog= nize the substantial burden this regulation imposes on smaller companies. C= EOs and chief financial officers would still be required to personally cert= ify that the internal controls and procedures are adequate, exposing them t= o personal liability. Others, including the president's Jobs Council, have = proposed complete exemption from Section 404(b) for all companies with less= than $1 billion of market capitalization - approximately 85 percent of all= companies - so this proposal strikes a more balanced middle ground between= investor protection and capital formation. b. Limited Look-Back for Audited Financials. This bill would only requ= ire emerging growth companies to provide audited financial statements for t= he two years before registration, rather than three years. Full compliance = would be phased in each year so a full five years of audited financials are= required after three years. c. Limited Exemptions from Executive Compensation Votes and Disclosure= s. The bill would also exempt emerging growth companies from the requiremen= t to hold a stockholder vote on executive compensation arrangements, includ= ing so-called "golden parachutes." The SEC already recognized the additiona= l burden these requirements impose on small issuers by giving them an addit= ional year to comply with the new rules. Because the "say-on-pay" and relat= ed votes are only required to occur once every three years, this bill effec= tively only exempts companies from a maximum of two such votes. Furthermore= , shareholders in venture-backed companies are likely to be well-protected = as a result of the terms negotiated by venture capital investors and the fa= ct that founders and senior executives are often large shareholders themsel= ves, ensuring interests are aligned. 3. Improve the Availability and Flow of Information for Investors. To = increase visibility for emerging growth companies while maintaining transpa= rency and consistency for investors, the bill would improve the flow of inf= ormation about emerging growth companies to investors before and after an I= PO. The proposals would update restrictions on communications to account fo= r advances in modes of communication and the information available to inves= tors. In particular, the bill would: a. Close the Information Gap for Smaller Companies. Existing rules all= ow research on large companies to be provided continuously, but prohibit in= vestment banks participating in the underwriting process from publishing re= search on emerging growth companies. This bill would allow investors to hav= e access to research reports about emerging growth companies prior to the I= PO. However, the bill would maintain other extensive protections in this ar= ea, such as Sarbanes Oxley Section 501 (addressing potential conflicts of i= nterest that can arise when analysts recommend equity securities), SEC Regu= lation AC, the Global Research Analyst Settlement and disclosure requiremen= ts regarding potential conflicts of interest. These changes would address t= he current information shortfall by providing a way for investors to obtain= research about IPO candidates in a manner consistent with investor protect= ion. b. Permit Emerging Growth Companies to "Test the Waters" Prior to Fili= ng a Registration Statement. The bill would permit emerging growth companie= s to gauge preliminary interest in a potential offering by expanding the ra= nge of permissible pre-filing communications to institutional investors, an= d filing a registration statement with the SEC on a confidential basis (whi= ch non-U.S. companies are currently permitted to do). This would help emerg= ing growth companies determine the likelihood of a successful IPO, but gene= ral solicitation would still be prohibited, as would any expanded communica= tions to retail investors. Anti-fraud provisions of the securities laws wou= ld still apply, and a prospectus would still be required prior to any sale. To directly link to this news release, please use the following address: http://crapo.senate.gov/media/newsreleases/release_full.cfm?id=3D335024 # # # This is generated from an unattended mailbox. If you have constituent comme= nts or information you would like forwarded to Senator Crapo, please do so = at the Senator's website, http://crapo.senate.gov<http://crapo.senate.gov/>= Comments sent to this e-mail address will not be responded to. --_000_EF22B21D8CEAA148B030C28A9708DB9E02DE5213CFSENATEEX05sen_ Content-Type: text/html; charset="us-ascii" Content-Transfer-Encoding: quoted-printable <html xmlns:v=3D"urn:schemas-microsoft-com:vml" xmlns:o=3D"urn:schemas-micr= osoft-com:office:office" xmlns:w=3D"urn:schemas-microsoft-com:office:word" = xmlns:m=3D"http://schemas.microsoft.com/office/2004/12/omml" xmlns=3D"http:= //www.w3.org/TR/REC-html40"><head><meta http-equiv=3DContent-Type content= =3D"text/html; charset=3Dus-ascii"><meta name=3DGenerator content=3D"Micros= oft Word 12 (filtered medium)"><style><!-- /* Font Definitions */ @font-face {font-family:"Cambria Math"; panose-1:2 4 5 3 5 4 6 3 2 4;} @font-face {font-family:Calibri; panose-1:2 15 5 2 2 2 4 3 2 4;} @font-face {font-family:Consolas; panose-1:2 11 6 9 2 2 4 3 2 4;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {margin:0in; margin-bottom:.0001pt; text-autospace:none; font-size:10.0pt; font-family:"Arial","sans-serif";} a:link, span.MsoHyperlink {mso-style-priority:99; color:blue; text-decoration:underline;} a:visited, span.MsoHyperlinkFollowed {mso-style-priority:99; color:purple; text-decoration:underline;} p.MsoPlainText, li.MsoPlainText, div.MsoPlainText {mso-style-priority:99; mso-style-link:"Plain Text Char"; margin:0in; margin-bottom:.0001pt; font-size:10.5pt; font-family:Consolas;} p {mso-style-priority:99; mso-margin-top-alt:auto; margin-right:0in; mso-margin-bottom-alt:auto; margin-left:0in; font-size:12.0pt; font-family:"Times New Roman","serif";} span.PlainTextChar {mso-style-name:"Plain Text Char"; mso-style-priority:99; mso-style-link:"Plain Text"; font-family:Consolas;} span.EmailStyle20 {mso-style-type:personal-compose; font-family:"Calibri","sans-serif"; color:windowtext;} span.EmailStyle21 {mso-style-type:personal; font-family:"Calibri","sans-serif"; color:windowtext;} MsoChpDefault {mso-style-type:export-only; font-size:10.0pt;} @page WordSection1 {size:8.5in 11.0in; margin:1.0in 1.0in 1.0in 1.0in;} div.WordSection1 {page:WordSection1;} --></style><!--[if gte mso 9]><xml> <o:shapedefaults v:ext=3D"edit" spidmax=3D"1026" /> </xml><![endif]--><!--[if gte mso 9]><xml> <o:shapelayout v:ext=3D"edit"> <o:idmap v:ext=3D"edit" data=3D"1" /> </o:shapelayout></xml><![endif]--></head><body lang=3DEN-US link=3Dblue vli= nk=3Dpurple><div class=3DWordSection1><p class=3DMsoPlainText><span style= =3D'font-size:12.0pt;font-family:"Arial","sans-serif"'>FOR IMMEDIATE RELEAS= E            &n= bsp;           &nbsp= ;    Contact:  Crapo (208) 344-1108   &n= bsp;  <o:p></o:p></span></p><p class=3DMsoPlainText><span style=3D'fon= t-size:12.0pt;font-family:"Arial","sans-serif"'>December 1, 2011 &nbsp= ;            &n= bsp;           &nbsp= ;            &n= bsp;           &nbsp= ;             S= chumer (202) 224-2939<o:p></o:p></span></p><p class=3DMsoPlainText><span st= yle=3D'font-size:12.0pt;font-family:"Arial","sans-serif"'>  &nbsp= ;            &n= bsp;           &nbsp= ;            &n= bsp;           &nbsp= ;            &n= bsp;           &nbsp= ;            &n= bsp;       Toomey (202) 224-0437<o:p></o:p></= span></p><p class=3DMsoPlainText><span style=3D'font-size:12.0pt;font-famil= y:"Arial","sans-serif"'>        &nb= sp;            =             &nb= sp;            =             &nb= sp;            =              &n= bsp;           &nbsp= ; Warner (202) 224-2023       &nbsp= ;            &n= bsp;           &nbsp= ;            &n= bsp; <o:p></o:p></span></p><p class=3DMsoPlainText><span style=3D'font-size= :12.0pt;font-family:"Arial","sans-serif"'>     &nb= sp;            =             &nb= sp;            =             &nb= sp;          <o:p></o:p></span= ></p><p class=3DMsoPlainText><o:p> </o:p></p><p class=3DMsoPlainText><= b><span style=3D'font-size:16.0pt;font-family:"Arial","sans-serif"'>CRAPO, = SCHUMER, TOOMEY, WARNER ANNOUNCE BIPARTISAN PLAN TO MAKE IT EASIER FOR GROW= ING FIRMS TO GO PUBLIC<o:p></o:p></span></b></p><p class=3DMsoPlainText><b>= <i><span style=3D'font-size:12.0pt;font-family:"Arial","sans-serif"'><o:p>&= nbsp;</o:p></span></i></b></p><p class=3DMsoPlainText align=3Dcenter style= =3D'text-align:center'><b><i><span style=3D'font-size:12.0pt;font-family:"A= rial","sans-serif"'>Package of Reforms Would Spur Job Creation by Boosting = Smaller Companies’ Access to Capital<o:p></o:p></span></i></b></p><p = class=3DMsoPlainText align=3Dcenter style=3D'text-align:center'><span style= =3D'font-size:12.0pt;font-family:"Arial","sans-serif"'><o:p> </o:p></s= pan></p><p class=3DMsoPlainText><span style=3D'font-size:12.0pt;font-family= :"Arial","sans-serif"'>WASHINGTON, D.C. — U.S. Senators Mike Crapo (R= -Idaho), Charles Schumer (D-New York), Pat Toomey (R-Pennsylvania) and Mark= Warner (D-Virginia) today announced a bipartisan plan to make it easier fo= r growing firms to go public so they can expand and create jobs. The propos= al would make it easier for small and medium-sized companies to access capi= tal through public markets.<o:p></o:p></span></p><p class=3DMsoPlainText><s= pan style=3D'font-size:12.0pt;font-family:"Arial","sans-serif"'><o:p> = </o:p></span></p><p class=3DMsoPlainText><span style=3D'font-size:12.0pt;fo= nt-family:"Arial","sans-serif"'>Studies show that more than 90 percent of j= ob growth occurs after companies go public, but fewer small and medium-size= d companies are taking this step in recent years, often citing the administ= rative and compliance burdens as the main obstacles to going public. The bi= partisan bill, known as the Reopening American Capital Markets to Emerging = Growth Companies Act of 2011, would reduce these hurdles of an initial publ= ic offering by phasing in many of the costliest obligations over time while= maintaining key investor protections.<o:p></o:p></span></p><p class=3DMsoP= lainText><span style=3D'font-size:12.0pt;font-family:"Arial","sans-serif"'>= <o:p> </o:p></span></p><p class=3DMsoPlainText><span style=3D'font-siz= e:12.0pt;font-family:"Arial","sans-serif"'>Crapo said: “This on-ramp = proposal will make it easier for young, innovative companies to access the = public markets and ultimately the capital they need to grow and create jobs=   It will reverse the decline we’ve seen in IPOs over the last = decade by temporarily scaling back certain regulatory requirements imposed = by the Sarbanes Oxley Act and the Dodd Frank Act, positively impacting job = creation in the United States.  The IPO Task Force estimates that the = average cost for a company to go public is $2.5 million, and the annual cos= t to stay public is $1.5 million."<o:p></o:p></span></p><p class=3DMso= PlainText><span style=3D'font-size:12.0pt;font-family:"Arial","sans-serif"'= ><o:p> </o:p></span></p><p class=3DMsoPlainText><span style=3D'font-si= ze:12.0pt;font-family:"Arial","sans-serif"'>Schumer said: “During dif= ficult economic times, it is critical that we give growing innovators the b= reathing room that they need to access public markets. The vast majority of= job creation occurs after companies go public so it makes sense to make th= e IPO process easier for emerging firms. This is a commonsense set of refor= ms that can bridge the partisan divide and have a real impact on job creati= on.”<o:p></o:p></span></p><p class=3DMsoPlainText><span style=3D'font= -size:12.0pt;font-family:"Arial","sans-serif"'><o:p> </o:p></span></p>= <p class=3DMsoPlainText><span style=3D'font-size:12.0pt;font-family:"Arial"= ,"sans-serif"'>Toomey said: “In this struggling economy, Congress sho= uld do everything it can to make it easier for small businesses to grow and= create new jobs. This legislation will make it easier for firms to go publ= ic and in turn, create many more jobs. This legislation offers a bipartisan= path for Congress to help get our economy moving again.”<o:p></o:p><= /span></p><p class=3DMsoPlainText><span style=3D'font-size:12.0pt;font-fami= ly:"Arial","sans-serif"'><o:p> </o:p></span></p><p class=3DMsoPlainTex= t><span style=3D'font-size:12.0pt;font-family:"Arial","sans-serif"'>Warner = said: “Encouraging more companies to go public instead of remaining p= rivate or waiting to be acquired will increase the vibrancy and competitive= ness of the American economy. It also will encourage the sort of innovation= and entrepreneurial activity that creates jobs and can help to turn this e= conomy around. Smarter regulation can improve our markets and ultimately ma= ke them more attractive for both investors and entrepreneurs, and this legi= slation will move us closer to that.”<o:p></o:p></span></p><p class= =3DMsoPlainText><span style=3D'font-size:12.0pt;font-family:"Arial","sans-s= erif"'><o:p> </o:p></span></p><p class=3DMsoPlainText><span style=3D'f= ont-size:12.0pt;font-family:"Arial","sans-serif"'>In a recent survey conduc= ted by NASDAQ and the National Venture Capital Association, 86 percent of c= hief executive officers cited “accounting and compliance costs”= and 80 percent cited “regulatory risks” as key concerns about = going public. With companies taking longer than ever to go public – o= n average 9.4 years, compared to fewer than five years in the 1980s –= rapid expansion and job growth is being delayed, and the senators’ l= egislation aims to accelerate the expansion and job growth made possible by= accessing public markets.<o:p></o:p></span></p><p class=3DMsoPlainText><sp= an style=3D'font-size:12.0pt;font-family:"Arial","sans-serif"'><o:p> <= /o:p></span></p><p class=3DMsoPlainText><span style=3D'font-size:12.0pt;fon= t-family:"Arial","sans-serif"'>The senators’ bill would establish a n= ew category of issuers, called “emerging growth companies” that= have less than $1 billion in annual revenues at the time they register wit= h the U.S. Securities and Exchange Commission and less than $700 million in= publicly-traded shares after the IPO. The legislation creates a transition= al “on-ramp” status for these companies to encourage them to go= public. The “on-ramp” period would last as many as five years,= or until a company reaches $1 billion in annual revenue or $700 million in= publicly-traded shares. Full compliance with certain obligations would be = phased in during that period.<o:p></o:p></span></p><p class=3DMsoPlainText>= <span style=3D'font-size:12.0pt;font-family:"Arial","sans-serif"'><o:p>&nbs= p;</o:p></span></p><p class=3DMsoPlainText><span style=3D'font-size:12.0pt;= font-family:"Arial","sans-serif"'>A full summary of the Senators’ pro= posal appears below.<o:p></o:p></span></p><p class=3DMsoPlainText><span sty= le=3D'font-size:12.0pt;font-family:"Arial","sans-serif"'><o:p> </o:p><= /span></p><p class=3DMsoPlainText><b><span style=3D'font-size:12.0pt;font-f= amily:"Arial","sans-serif"'>Reopening American Capital Markets to Emerging = Growth Companies Act of 2011 Sponsored By Senators Schumer, Toomey, Warner = and Crapo<o:p></o:p></span></b></p><p class=3DMsoPlainText><span style=3D'f= ont-size:12.0pt;font-family:"Arial","sans-serif"'><o:p> </o:p></span><= /p><p class=3DMsoPlainText><span style=3D'font-size:12.0pt;font-family:"Ari= al","sans-serif"'>BACKGROUND SUMMARY<o:p></o:p></span></p><p class=3DMsoPla= inText><span style=3D'font-size:12.0pt;font-family:"Arial","sans-serif"'><o= :p> </o:p></span></p><p class=3DMsoPlainText><span style=3D'font-size:= 12.0pt;font-family:"Arial","sans-serif"'>1.      C= reate a new category of “Emerging Growth Companies.” The bill w= ould establish a new category of issuers, called “emerging growth com= panies,” who have less than $1 billion in annual revenues at the time= they register with the SEC and less than $700 million in public float afte= r the IPO. These companies will have as many as five years (or until they r= each $1 billion in annual revenue or $700 million in public float) to compl= y with certain regulatory requirements. “On-Ramp” status is des= igned to be temporary and transitional, encouraging small and medium-sized = companies to go public but ensuring they transition to full compliance over= time or as they grow. Only an estimated 11-13 percent of companies and 3 p= ercent of total market capitalization would qualify for “on ramp&#822= 1; status if these provisions were in effect today.<o:p></o:p></span></p><p= class=3DMsoPlainText><span style=3D'font-size:12.0pt;font-family:"Arial","= sans-serif"'><o:p> </o:p></span></p><p class=3DMsoPlainText><span styl= e=3D'font-size:12.0pt;font-family:"Arial","sans-serif"'>2.  &nbsp= ;   Provide an “On-Ramp” for Emerging Growth Companie= s by Leveraging Existing Scaled Regulation Approach. The scaled regulations= are limited to those areas of compliance that are high cost and which do n= ot compromise core investor protections or disclosures, and all of them bui= ld on existing scaled regulations. These include:<o:p></o:p></span></p><p c= lass=3DMsoPlainText><span style=3D'font-size:12.0pt;font-family:"Arial","sa= ns-serif"'>a.      Section 404(b) of Sarbanes-Oxle= y. This is the requirement that public companies pay an outside auditor, in= addition to auditing the financial statements, to attest to the company&#8= 217;s internal controls and procedures. SEC studies have shown that complia= nce with Sarbanes Oxley costs companies more than $2 million per year. All = companies with market capitalization of less than $75 million are already e= xempt, because lawmakers and the SEC recognize the substantial burden this = regulation imposes on smaller companies. CEOs and chief financial officers = would still be required to personally certify that the internal controls an= d procedures are adequate, exposing them to personal liability. Others, inc= luding the president’s Jobs Council, have proposed complete exemption= from Section 404(b) for all companies with less than $1 billion of market = capitalization – approximately 85 percent of all companies – so= this proposal strikes a more balanced middle ground between investor prote= ction and capital formation.<o:p></o:p></span></p><p class=3DMsoPlainText><= span style=3D'font-size:12.0pt;font-family:"Arial","sans-serif"'>b. &n= bsp;    Limited Look-Back for Audited Financials. This bill = would only require emerging growth companies to provide audited financial s= tatements for the two years before registration, rather than three years. F= ull compliance would be phased in each year so a full five years of audited= financials are required after three years.<o:p></o:p></span></p><p class= =3DMsoPlainText><span style=3D'font-size:12.0pt;font-family:"Arial","sans-s= erif"'>c.      Limited Exemptions from Executive C= ompensation Votes and Disclosures. The bill would also exempt emerging grow= th companies from the requirement to hold a stockholder vote on executive c= ompensation arrangements, including so-called “golden parachutes.&#82= 21; The SEC already recognized the additional burden these requirements imp= ose on small issuers by giving them an additional year to comply with the n= ew rules. Because the “say-on-pay” and related votes are only r= equired to occur once every three years, this bill effectively only exempts= companies from a maximum of two such votes. Furthermore, shareholders in v= enture-backed companies are likely to be well-protected as a result of the = terms negotiated by venture capital investors and the fact that founders an= d senior executives are often large shareholders themselves, ensuring inter= ests are aligned.<o:p></o:p></span></p><p class=3DMsoPlainText><span style= =3D'font-size:12.0pt;font-family:"Arial","sans-serif"'><o:p> </o:p></s= pan></p><p class=3DMsoPlainText><span style=3D'font-size:12.0pt;font-family= :"Arial","sans-serif"'>3.      Improve the Availab= ility and Flow of Information for Investors. To increase visibility for eme= rging growth companies while maintaining transparency and consistency for i= nvestors, the bill would improve the flow of information about emerging gro= wth companies to investors before and after an IPO. The proposals would upd= ate restrictions on communications to account for advances in modes of comm= unication and the information available to investors. In particular, the bi= ll would:<o:p></o:p></span></p><p class=3DMsoPlainText><span style=3D'font-= size:12.0pt;font-family:"Arial","sans-serif"'>a.    &nb= sp; Close the Information Gap for Smaller Companies. Existing rules allow r= esearch on large companies to be provided continuously, but prohibit invest= ment banks participating in the underwriting process from publishing resear= ch on emerging growth companies. This bill would allow investors to have ac= cess to research reports about emerging growth companies prior to the IPO. = However, the bill would maintain other extensive protections in this area, = such as Sarbanes Oxley Section 501 (addressing potential conflicts of inter= est that can arise when analysts recommend equity securities), SEC Regulati= on AC, the Global Research Analyst Settlement and disclosure requirements r= egarding potential conflicts of interest. These changes would address the c= urrent information shortfall by providing a way for investors to obtain res= earch about IPO candidates in a manner consistent with investor protection.= <o:p></o:p></span></p><p class=3DMsoPlainText><span style=3D'font-size:12.0= pt;font-family:"Arial","sans-serif"'>b.      Permi= t Emerging Growth Companies to “Test the Waters” Prior to Filin= g a Registration Statement. The bill would permit emerging growth companies= to gauge preliminary interest in a potential offering by expanding the ran= ge of permissible pre-filing communications to institutional investors, and= filing a registration statement with the SEC on a confidential basis (whic= h non-U.S. companies are currently permitted to do). This would help emergi= ng growth companies determine the likelihood of a successful IPO, but gener= al solicitation would still be prohibited, as would any expanded communicat= ions to retail investors. Anti-fraud provisions of the securities laws woul= d still apply, and a prospectus would still be required prior to any sale.<= o:p></o:p></span></p><p class=3DMsoPlainText><span style=3D'font-size:12.0p= t;font-family:"Arial","sans-serif"'><o:p> </o:p></span></p><p class=3D= MsoPlainText><span style=3D'font-size:12.0pt;font-family:"Arial","sans-seri= f"'>           &nbsp= ;            &n= bsp;           &nbsp= ;            &n= bsp;     </span><span style=3D'font-size:12.0pt'><o:p><= /o:p></span></p><p class=3DMsoNormal><span style=3D'font-size:12.0pt'><o:p>=  </o:p></span></p><p class=3DMsoNormal><a name=3D"OLE_LINK1"><span sty= le=3D'font-size:12.0pt'>To directly link to this news release, please use t= he following address: <o:p></o:p></span></a></p><p class=3DMsoNormal><span = style=3D'font-size:12.0pt;color:blue'><a href=3D"http://crapo.senate.gov/me= dia/newsreleases/release_full.cfm?id=3D335024">http://crapo.senate.gov/medi= a/newsreleases/release_full.cfm?id=3D335024</a></span><o:p></o:p></p><p cla= ss=3DMsoNormal><span style=3D'font-size:12.0pt'><o:p> </o:p></span></p= ><p class=3DMsoNormal align=3Dcenter style=3D'text-align:center'><span styl= e=3D'font-size:12.0pt'># # #<o:p></o:p></span></p><p class=3DMsoNormal alig= n=3Dcenter style=3D'text-align:center'><span style=3D'font-size:12.0pt'><o:= p> </o:p></span></p><p><span style=3D'font-size:10.0pt;font-family:"Ar= ial","sans-serif";color:black'>This is generated from an unattended mailbox= If you have constituent comments or information you would like forwarded = to Senator Crapo, please do so at the Senator's website, <a href=3D"http://= crapo.senate.gov/" title=3D"http://crapo.senate.gov/">http://crapo.senate.g= ov</a>. Comments sent to this e-mail address will not be responded to.</spa= n><span style=3D'font-size:10.0pt;font-family:"Arial","sans-serif"'><o:p></= o:p></span></p><p class=3DMsoNormal><span style=3D'font-size:11.0pt;font-fa= mily:"Calibri","sans-serif"'><o:p> </o:p></span></p><p class=3DMsoNorm= al align=3Dcenter style=3D'text-align:center'><span style=3D'font-size:12.0= pt'><o:p> </o:p></span></p><p class=3DMsoNormal><span style=3D'font-si= ze:11.0pt;font-family:"Calibri","sans-serif"'><o:p> </o:p></span></p><= p class=3DMsoNormal><span style=3D'font-size:11.0pt;font-family:"Calibri","= sans-serif"'><o:p> </o:p></span></p></div></body></html>= --_000_EF22B21D8CEAA148B030C28A9708DB9E02DE5213CFSENATEEX05sen_--]