The SEC is being flooded with Form 15 filings as many banks are rushing to deregister their common stock and free themselves from the reporting requirements of the Exchange Act, according to a report from SNL Financial.
The financial information firm reports that small banks are taking advantage of relaxed securities registration requirements following passage of the JOBS Act.
The Jumpstart Our Business Startups Act, signed into law April 5, increased the threshold under which a bank or bank holding company may terminate registration of a security to 1,200 shareholders of record from 300. It also raised the threshold requiring companies to register under the Exchange Act to 2,000 shareholders from 500 earlier.
The new law sparked action from many small banks that wanted freedom from reporting requirements under the Securities Exchange Act of 1934, reports SNL. Since the JOBS Act was signed, 61 banks have filed to deregister their common stock and suspend securities reporting requirements, greater than the total number of banks that have deregistered in the last 16 quarters. The filings carry a 90-day waiting period before the deregistration becomes official.