Crowdfund Capital Advisors principles Jason Best and Sherwood Neiss have joined the growing group of crowdfunding industry participants demanding the Securities and Exchange Commission release final rules on Title III crowdfunding immediately. In a comment letter addressed to SEC Chair Mary Jo White, Best and Neiss urged the Chair to release final rules now.
This portion of the JOBS Act, signed into law over 2 years ago, legalizes crowdfunding for anyone; without income or wealth barriers that encumber other exemptions. Retail crowdfunding has the potential to be transformative for the economy – generating jobs, fostering innovation and boosting economic growth. Paradoxically final rules have languished in regulatory limbo as parochial politics have blocked a law that could be highly beneficial to the country. When the President signed the bill into law back in April 2012 (over 2 years ago) it was broadly heralded as a sign of a bipartisan initiative – proving members of Congress could work together on legislation that was viewed as beyond internecine politics. The reality has been delivered in the extensive delay.
Jason Best commented on the delayed act expressing hope for the nascent industry;
“Realistically, it might have been difficult for the crowdfunding industry to launch in a complete fashion the day after President Obama signed the JOBS Act. However we now have had 865 days and the industry has wasted no time in building the services to both protect investors and deliver capital to SMEs and start-ups: portals, investor networks, due diligence services, background checks, accreditation verification, new escrow and Broker/Dealer services, analytics tools, and data analysis at leading academic institutions. There has never been a sector of the finance community more focused on transparency and investor protection than the equity and debt crowdfunding industry. As the “new kid on the block” we are all laser focused on this.”
The missive authored by Best and Neiss, two of the creators of the JOBS Act who helped push the bill through to signing into law, notes that “no law is perfect” but there is a profound demand for a “starting point”.
Best and Neiss continue to point out how the United States is at risk of a competitive disadvantage as other countries have quickly moved to embrace the new method of capital formation noting that London has claimed the throne of the “worlds crowdfunding capital”. The letter makes suggestions for improving proposed rules – points that few in the industry would debate.
In closing the CCA principles declare;
“We kindly urge you to work with the industry to resolve any outstanding issues and to move the Title III rules to a vote as quickly as possible.”
The comment letter is embedded below.