Stephanie Speer, NAR’s Commercial Regulatory Policy Representative would like to let you know that Uncle Sam is grappling with all the implications of the 2012 passage of the Jumpstart Our Business Startups (JOBS) Act. But this isn’t another case of “the government bureaucracy expanding to meet the needs of the expanding government bureaucracy”. This is about legally raising capital using crowdfunding techniques on the internet, a topic near to the heart of every dealmaker faced with stiff credit availability in a banking environment dominated by, well, banks. Enjoy Stephainie’s guest post on a pair of SEC events on crowdfunding. – WG
The Securities and Exchange Commission (SEC) held a two-day event in Washington D.C. focusing on small business capital creation, with a special emphasis on the implementation of the Jumpstart Our Business Startups (JOBS) Act of 2012. The SEC Government Business Forum on Small Business Capital Formation kicked off the event with a roundtable discussion featuring panelists from the Small Business Administration (SBA) and SEC, followed by a second day of panel discussions and work groups.
For context, regulators view the JOBS Act as partner legislation to the Dodd–Frank Wall Street Reform and Consumer Protection Act. Both were created in response to the Great Recession to focus on bank regulations. The JOBS Act was designed to provide more avenues for small businesses to raise capital, expand their operations, and create more jobs. Most of the JOBS Act provisions are in place but there is one provision not yet finalized that is generating a great deal of buzz among many groups of people: crowdfunding.
Much of the discussion at the event focused on how to make crowdfunding regulation work at the federal level. The SEC has proposed regulation that is not finalized and there isn’t yet an anticipated date of completion. Many states already have state-specific crowdfunding laws, but those are limiting to businesses because they only deal with activities occurring within a state. Businesses, investors, and state regulators are clamoring for the federal regulations to be completed so that crowdfunding can legally expand across state borders.
NAR has been monitoring the proposed crowdfunding regulations and working with experts and regulators in the field, as it views crowdfunding as another potential source of funding for commercial real estate. For additional information, check out our recent article in the fall edition of Commercial Connections on the subject (available here) and please contact me at [email protected] with any questions.