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The Current Status of the JOBS Act Within The SEC

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The Current Status of the JOBS Act Within The SEC

By Startup Valley (522 words)
Posted in Crowdfunding on June 19, 2013

There are (1) comments permalink

President Obama first signed the JOBS Act into law on April 5, 2012. Portions of the JOBS Act had a requirement that the Securities and Exchange Commission adopt changes to existing restrictions on advertising private security placements, propose new rules or revise them.

The bill will ultimately be responsible for introducing new entrepreneurs to market through equity crowdfunding. It can also create and stimulate economic growth by creating new jobs and demand for people of skilled trades.

Dodd-Frank Act

In October of 2012, the Investor Advisor Committee, created as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, weighed in with recommendations. Their suggestions provide much more protection for investors.

The SEC is required by statute to comment on any recommendations from the IAC. In January 2013, Commissioner Aguilar made note of the recommendations. The SEC has also continued to accumulate hundreds of comments about the changes on their website.

The Commission held meetings with parties that could be impacted by any rule changes. In April 2013, agency officials met with representatives of the Investor Protection for the Consumer Federation of America.

Bad Actor Provisions

Another consideration is that Dodd-Frank stipulated that the SEC enact provisions preventing people with securities violations from using Rule 506. This consideration also raises the question of whether these restrictions should even apply to violations that took place before Dodd-Frank was in existence.

Either way, many investors believe these "bad actor" guidelines should be refined before the 506 rules get the final stamp of approval by the SEC. It seems obvious to have strict "bad actor" rules. Otherwise, investment promoters with a history of securities violations could advertise and promote private investment placements.

Congressional Hearings

The delays from the SEC have promoted several moves by power players in Washington. Congress held several hearings recently on the current state of implementation of the JOBS Act. In addition, Chairman White related testimony in recent hearings. These actions indicate that Congress is attempting to move the SEC forward on their previous commitment to make decisions on the matter.

All of this will be heavily influenced by the leadership of the new SEC Chairman, Mary Jo White. Her public declarations have been non-committal regarding any changes. She has only stated that she will work with the commissioners to complete rule making in a timely fashion. She had taken a similar position at both the confirmation hearing in March and before the House Financial Services Committee in May of this year.

Current Status

On May 15, 2103, Lona Nallengara was named SEC Chief of Staff. Also, Keith Higgins became the head of the Division of Corporation Finance. Both of these appointments suggest the Commission is attempting to move forward with greater speed on the matter.

Comments (1)

Kristi Gleason posted on: November 9, 2015

please review the contents of the article On May 15, 2103is not a year in the recent past or near future

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