NEW YORK (CNBC) On Mad Money, we consistently emphasize the importance of job creation for a sustained recovery, and this needs fuel from small, emerging business.
This week we've been hearing a slew of complaints about the JOBS Act, the acronym for the "Jumpstart Our Business Startups Act," which marked its first anniversary last week. While President Obama signed the legislation back on April 5, 2012, many believe it has fallen short in its ambitions to aid small companies to raise money more easily and thus create more jobs.
Just take a look at some of the headlines: "JobsAct falls short of grand promises" at the Washington Post; The JOBS Act Turns 1—and It's an Utter Failure" at the Atlantic; "Slow-Moving SEC blamed for blocking JOBS Act" at Politico; and JOBS Act Sputters on IPOs" at the Wall Street Journal.
However, in order to think critically about what should be done now from the perspective of the Securities and Exchange Commission (SEC), it is important to differentiate the complaints, as the JOBS Act was a "grab act' of sorts to help a range of small businesses. We can parse the criticisms in two: (1) What has already been implemented but doesn't seem to be fulfilling the set-out aims, and (2) What has been slow-going to implement and needs to overcome the obstacles that have arisen throughout the process.
First, on the "implemented but not working" side of the equation: Initial public offerings (IPOs).
Title I of the JOBS Act aimed to encourage "emerging growth companies" (EGCs)—which often times felt burdened with the hurdles of the IPO process—to register with the SEC. The measure, which was implemented immediately, allows companies with under $1bn in revenue to register confidentially and to include less disclosure (i.e. only 2 years of historical financials).