Implementation of the JOBS Act, which President Barack Obama said would jumpstart start-ups in America, is at a near standstill.
The sticking point? Rulemakers are stymied by the lack of clarity on key issues such as crowdfunding and general solicitation and advertising of private offerings — issues that some say clash with provisions of the Sarbanes–Oxley Act and the Dodd–Frank Wall Street Reform and Consumer Protection Act.
An even greater sticking point? Dodd-Frank. The SEC, tied up with the slow pace of rulemaking with Dodd-Frank, which was passed in 2010, simply doesn’t have the resources to speedily resolve JOBS.
Of the 398 total rulemaking requirements in Dodd-Frank, 127 or 31.9 percent have been met with finalized rules, and rules have been proposed that would meet 135 or 33.9 percent more. Rules have yet to be proposed for more 139 or more than one third of the total, according to a report by Davis Polk, a New York law firm that routinely tracks progress on Dodd-Frank rulemaking.
The JOBS Act, passed in April, has been missing its rulemaking deadlines. Under the law, the SEC was required to implement within 90 days of April 5 the “provision that eliminates a ban on general solicitation and advertising of certain private securities, so long as they are sold to accredited investors.” However, Schapiro indicated early at a House hearing she did not believe the SEC could get it done in that time frame. Three months later at an SEC hearing late September, the lack of progress was more than evident. According to SEC spokesman John Nestor on August 20, the “90-day deadline did not provide a realistic time frame for the drafting of a new rule, the preparation of an accompanying economic analysis, the proper review by the commission and an opportunity for public input.” In October there still hasn’t been much progress.....