Wagner: It’s past time for the SEC to implement the JOBS ActPosted by on April 22, 2013
A little over a year ago, Congress passed the Jumpstart Our Business Startups (JOBS) Act. The JOBS Act was designed to make it easier for entrepreneurs to raise capital and turn their ideas into job-creating businesses that might one day go public. At a time of slow growth and high unemployment, the JOBS Act was a big win for the St. Louis region and the American economy.
Not only was the JOBS Act good policy — it also was an important bipartisan breakthrough at a time of heightened partisanship. During the Rose Garden signing ceremony, President Obama hailed the bill as a “potential game-changer” and noted that the JOBS Act “represents exactly the kind of bipartisan action we should be taking in Washington to help our economy.”
I couldn’t agree more with the president. But unfortunately, the gears of bureaucracy in Washington have kept the JOBS Act from being implemented. As entrepreneurs and investors in the St. Louis region sit and wait, the Securities and Exchange Commission (SEC) has failed to finalize key aspects of the JOBS Act.
Congress directed the SEC to write simple rules that would allow entrepreneurs to start raising capital, while also ensuring strong investor protections remain in place. But one year later, the SEC has missed important deadlines to finalize two of these rules, and there is little indication they are ready to implement other portions of the bill.
For example, one provision would make it easier for businesses to advertise investments in their company to potential investors. The SEC was required to issue a final rule for this provision by July 2012. However, nine months later the SEC has only gone so far as to issue a rule proposal, which is Washington’s way of saying “We’ll get back to you later.”
Another provision would create opportunities for startups to “crowdfund,” or pool small investments from a number of people who want to invest in companies they believe in. The SEC was required to finalize crowdfunding rules by December 2012, but again they have dragged their feet as startups and investors stand idle. It’s not as if these rulemakings are foreign to the SEC. In fact, writing rules that facilitate capital formation while maintaining investor protections is largely why the SEC exists. If the SEC is able to finalize rules dealing with “conflict minerals” in the Democratic Republic of the Congo (as they did in August 2012), there’s no reason why the JOBS Act should remain unfinished.
The St. Louis region stands to benefit from the JOBS Act in terms of jobs, growth and new innovations — but only if the Washington bureaucracy gets out of the way and lets American entrepreneurs do what they do best. The House Financial Services Committee, on which I serve, has made implementation of the JOBS Act a top priority for this Congress. The time for delays and excuses is over — the SEC must recognize that their inaction has real economic consequences.Ann Wagner is the Republican U.S. Representative from Missouri’s 2nd Congressional District.