Dude, where's my JOBS Act?June 29, 2012: 10:42 AM ET
Parts of the JOBS Act remain in limbo.
FORTUNE -- Apparently the SEC thinks deadlines are for chumps.
When President Obama signed the JOBS Act back in March, several of the provisions went into immediate effect. For example, the so-called "500 shareholder" rule was converted into a "2,000 shareholder" rule, and a group of smaller private companies was exempted from certain reporting requirements when filing to go public.
But many of the provisions were, well, provisional. They were vague statements of intent, with the actual rule-making kicked over the the Securities and Exchange Commission.
For example, the JOBS Act reversed an existing ban on general solicitation for private securities, like start-up companies or hedge funds. Not only would this mean that private companies and investment firms raising new capital would be able to publicly discuss the processes, but they'd even be able to take out advertisements. Great news for someone like me, both because it could make my job easier and my corporate overlords richer (thus making my job more secure).
The SEC was supposed to hash out the specifics by next week, but it's not going to happen. From MarketWatch:
The Securities and Exchange Commission will miss a deadline of July 4 to adopt rules lifting a general advertising ban for private securities offerings and expects to approve the rule sometime this summer, the top regulator for the agency said Thursday. "I expect that in the next two days we will publish time line for lifting the general solicitation ban and it will be done this summer," SEC chief Mary Schapiro told lawmakers in a House Oversight Committee. "The ... deadline doe not provide a realistic timeframe for drafting of the new rule, the preparation of an accompanying economic analysis, the proper review by the Commission, and an opportunity for public input."
Call me naive -- or call the SEC woefully underfunded -- but shouldn't the timeline have been set before the deadline was reached? Particularly when the "new rule" is basically just a removal of the old rule?
On the upside, Shapiro did say during yesterday's hearing that the SEC should meet its year-end deadline for establishing new rules that would permit companies to issue equity in exchange for crowd-funded capital. That said, we still haven't seen those draft proposals either -- and they promise to be far more complicated and controversial than the general solicitation exemption.
I reached out to the SEC for comment on the solicitation delay, but have not yet heard back.
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