Financial regulation pushes many rules to the SEC
When it comes to complex financial regulation, lawmakers have taken a path of less resistance by leaving so many of the particulars up to the SEC to develop and implement at a later date.
This approach is not entirely novel, but it has been perfected by lawmakers since the financial crisis. The best example of course is the landmark Dodd-Frank reform bill. Has there ever been a bill that left so much future development and implementation to the SEC--all on a tight deadline?
No one should carp that the SEC has fallen off the pace a bit. In fact, the agency deserves some credit for acting on many items. Another good example has cropped up, the JOBS Act, which was passed in April.
The Act imposed a December 31 deadline by which the SEC is required to "determine how to implement and enforce new rules allowing entrepreneurs to raise up to $1 million in equity through online crowdfunding platforms…The agency still must determine which rules will give entrepreneurs access to as many potential investors as possible without sacrificing the protections meant to help people avoid fraudulent business propositions. For instance, regulators are still working on ways to ensure investors are educated on how to evaluate crowdfunding proposals and how to monitor the amount of money investors are pouring into companies through online portals (the law places a tiered cap on crowdfunding investments based on individuals' income levels)," notes the Washington Post.
The Act also requires Finra to set new rules on crowdfunding online platforms. The reality is that the SEC will not likely meet the deadline, and Finra will not act until it does. So it will be a while, perhaps a year. This is one of several areas where the impact of the JOBS Act has been muted a bit. Provisions to loosen up the on the quiet period during which IPO underwriters are not allowed to issue research will not be utilized aggressively, for example. -Jim