Last Tuesday, November 4th, was a crucial day for your financial future…
It was 2014’s mid-term elections.
As you probably know, the Republicans were victorious…
But behind the scenes, there was an even bigger winner:
You.
The Results
The Republicans will gain control of the Senate, and they’ll increase their majority in the House.
What’s going to change?
Plenty – from healthcare reform to immigration.
But there’s one issue in particular that’ll affect your pocketbook…
A “Hot Button” Issue Going Your Way
Reforming the capital markets has been a recent “hot button” issue for Congress.
You see, for 82 years, investors have been hamstrung by the Securities Act of 1933.
This Act prohibited 98% of U.S. citizens from investing in the most profitable asset class in history: “private equity.”
Only wealthy investors – investors known as “accredited investors” – were legally allowed to invest in privately-held businesses like start-ups.
In 2012, a piece of legislation called The JOBS Act was supposed to fix all that…
So what happened?
Started Well… Then Stalled
Things started well.
The JOBS Act was signed into law in 2012, and the SEC quickly implemented a number of its provisions.
But “Title III,” the part that would enable ALL citizens to invest in start-ups, regardless of their net worth or income, seemed to stall.
Prominent Republicans, including Congressman Patrick McHenry, worked hard in the House Financial Services Committee to get Title III to the finish line – but with a Democratically controlled Senate, it didn’t stand a chance.
Now, the results of the mid-term elections are changing everything:
Here are three reasons the elections will move Title III to the front burner.
3 Reasons Title III Is Ready To Roll
1. Red House + Red Senate = Action
With the Republicans in control of the House and the Senate, Title III is primed for action.
As Jeb Hensarling, Chairman of the House Financial Services Committee, said:
“I look forward to working with Republicans and Democrats alike to promote economic growth by fostering the deepest, most liquid, competitive, efficient, innovative and transparent capital markets the world has ever seen.”
What’s on Hensarling’s plate?
Regulatory reform of the capital markets.
His counterpart in the Senate is Richard Selby, Chair of the Senate Banking Committee.
What’s on his plate?
Capital formation for small businesses.
Bottom line?
We now have motivated lawmakers working hard to get Title III enacted.
2. Obama’s Legacy
President Obama has two years left to salvage his legacy.
Focusing on sticky issues like healthcare or immigration won’t help…
But targeting areas like jobs and job growth sure could.
Why?
Because jobs boost the economy.
Given the JOBS Act’s potential to funnel capital into start-ups, it can be a powerful engine for job growth…
Now that would be a sensible target for Obama.
3. New SEC Appointments
The third reason Title III is ready to roll comes compliments of the SEC.
The SEC enforces securities laws… laws like the JOBS Act.
To stay in touch with the real world, the SEC created a committee (the “Advisory Committee on Small and Emerging Companies”) to focus on small business.
The Chair of the SEC, Mary Jo White, just appointed two leading advocates of the JOBS Act to this committee.
One is DJ Paul, a founder of CFIRA (a crowdfunding regulatory body whose tagline is “Advocating for Democratizing the Capital Markets”); the other is Sara Hanks, a securities attorney who’s been instrumental in pushing the JOBS Act forward.
Based on these appointments, Mary Jo seems to be preparing for Title III.
November 20 Could Be A Big Day
What’s next?
On November 20th, the SEC holds its annual forum to explore regulatory reform of the capital markets.
This year’s event promises to be a turning point.
Title III is tee’d up.
Congress is ready…
The SEC is ready…
Small businesses with big potential are ready…
And Crowdability will make sure that you’re ready, too.
Best Regards,
Founder
Crowdability.com
