February 15, 2012
Section 12(g): Corp Fin Grants Global No-Action Relief for RSUs at Pre-IPO Companies
– Broc Romanek, CompensationStandards.com
On Monday, Corp Fin granted this no-action relief to Fenwick & West regarding the use of restricted stock units for employees at pre-IPO companies under certain conditions without the company needing to register the securities under Section 12(g) of the ’34 Act (generally, the conditions are similar to those in Rule 12h-1(f) for options). By granting the letter to a law firm – and not a specific company – this no-action letter serves as broad relief for those pre-IPO companies hoping not to be forced to go public before they are ready, a hot topic as it has even attracted attention on Capitol Hill where proposed legislation is afoot to raise the 12(g) thresholds, etc. Previously, Corp Fin had been granting relief in this area on a case-by-case basis (egs. Twitter, Facebook – see this blog).