You’d think a vacancy at the top at the Securities and Exchange Commission would cause further delays in new regulations implementing crowdfunding and other provisions of the JOBS Act.
But that may not be the case, according toKaren Kerrigan, who heads the Small Business & Entrepreneurship Council and helped lead the push on Capitol Hill for the JOBS Act.
This legislation was enacted in April to make it easier for entrepreneurs to raise capital. The SEC, however, has beendragging its feet on issuing the regulations needed to make the law’s provisions a reality.
SEC Chairman Mary Schapiro announced yesterday that she will leave the agencynext month. That could be be good news for crowdfunding regulations, Kerrigan said, especially since Schapiro never seemed to embrace this innovation, which will allow businesses to raise capital by selling equity to lots of investors through Internet intermediaries..
“Perhaps new leadership — even if it is an interim leader — will breath some enhanced productivity and energy into the SEC’s work,” Kerrigan said. “At the staff level, the SEC is very engaged on JOBS Act provisions, and with the right signal and leadership I think the process can accelerate.”
SEC Commissioner Elisse Walter will serve as the agency’s interim chairman until Schapiro’s replacement is named by President Barack Obama and confirmed by the Senate — a process that could take months. Walter, however, appears to be more crowdfunding-friendly than Schapiro.
Crowdfunding advocates “showed up in force” at a Nov. 15 SEC forum on how to improve access to capital for small businesses, Kerrigan said.
Washington, DC — September 13, 2012 – The Securities and Exchange Commission should move with “due speed and clarity,” a panel urged the House Joint Subcommittee Hearing on JOBS Act Implementation. Naval Ravikant, CEO of AngelList, tesified that crowdfund investing will bring more capital to small business, adding ”Today’s small start-ups are tomorrow’s Fortune 500 employer.”
The committee originally scheduled the hearing to get a progress report from SEC chair Mary Schapiro, regarding the creation of rules that will implement the JOBS Act. The Jumpstart Our Business Startups Act requires the Securities and Exchange Commission to launch regulations to govern crowdfund investing. The Act will enable small businesses to raise up to $ 1 million per year from small investors through online, crowdfund portals.
Although Ms. Schaprio could not attend, members of academia, small businesses and the crowdfund communities urged that job creation visioned under the JOBS Act should move forward with due speed and clarity. “Critics have argued loose rules may invite fraud, Mr. Ravikand testified. “Rules that are too tight, however, may repel the good companies – the ones who drive all of the economic returns for investors.”
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