Following President Obama's signing of the "Jumpstart Our Business Startups Act" (the "JOBS Act"), private bank holding companies ("BHCs") can now avoid registration under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), so long as they have less than two thousand (2,000) shareholders of record at the end of any fiscal year. This is a substantial increase from the five hundred (500) shareholder threshold in effect prior to adoption of the JOBS Act. By avoiding Exchange Act registration, BHCs will not have to file annual and quarterly reports with the SEC or incur the other substantial costs and expenses associated with being a registered company. This is particularly advantageous for BHCs since they, unlike other issuers, can list their securities on the Over-the-Counter Bulletin Board without registering under the Exchange Act and can achieve some semblance of liquidity in their stock.
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