NSBA Meets with SEC on JOBS Act Implementation

July 17, 2012

NSBA met with senior SEC officials regarding the implementation of the JOBS Act.  The focus of the discussions were Title II of the Act, relating to general solicitation and general advertising seeking accredited investors in connection with Regulation D private placements; and Title III of the Act, relating to the new crowdfunding exemption from the securities registration requirements.

NSBA urged the Commission to guard against regulations that will undermine the purpose of the Act by imposing complex and costly regulations or by imposing obligations that create a high degree regulatory risk for issuers or crowdfunding portals. As a result of the meeting, the SEC is seeking additional input from NSBA on a number of issues.

One take-away from the meeting: there is a significant risk that the SEC will impose too high a regulatory burden on issuers and crowdfunding portals.  If this burden is too high, the JOBS Act may have little positive impact on the ability of small firms to raise capital.

NSBA is particularly concerned that 1) the SEC will make it very burdensome for issuers to verify the accredited investor status of investors; 2) the annual reporting requirements for crowdfunding issuers could become voluminous and costly; and 3) the regulatory burden on crowdfunding portals could be so high that maintaining a portal becomes cost prohibitive.

It is important that small firms express support for the JOBS Act and caution the SEC against imposing complex, costly regulations or creating legal risk to issuers and crowdfunding portals. NSBA has developed draft comments small-business owners are encouraged to personalize and use in filing their comments with the SEC.

To file comments, simply click here and input your contact information and comments.

Click here to downnload NSBA’s draft comments.