NEW YORK, Oct 17 (Reuters) – The U.S. Securities and Exchange Commission has approved a proposed amendment from Wall Street’s industry-funded regulator that helps investment banks use a new U.S law aimed at easing the way for small companies to go public.
Six months after the JOBS (Jumpstart Our Business Startups) Act was passed amid much fanfare as a way to help companies raise money in public markets, banks have not embraced some key provisions, which allow analysts to join bankers on pitches to investors, and publish research reports before a company goes public.
The new amendment from the Financial Industry Regulatory Authority, effective immediately, eases the restrictions somewhat by aligning rules of the financial watchdog with those of the JOBS Act. The SEC approved the amendment on Oct. 11.
The rule change removes the previous 40-day quiet period after an initial public offering so underwriters can publish research. The change would also allow analysts and bankers to attend IPO pitch meetings or “bakeoffs” together, as long as the analysts don’t solicit business.
However, the FINRA change involving communication between analysts and their investment banking colleagues does not apply to Wall Street’s largest banks, bound by a separate regulation, the Global Research Settlement.
- Obama’s next Treasury Secretary should not be a Wall Street stooge (deathandtaxesmag.com)