Upcoming: SEC Forum on Small Business

Each year, the Securities and Exchange Commission (SEC) holds a forum specifically directed toward forward movement on issues relating to capital formation for small business. It was originally created as a mandate from the Small Business Investment Incentive Act of 1980, lovingly named the Forum on Small Business Capital Formation, and in a perfect world, it should have become an important venue for discussion of recent JOBS Act concerns.

We don’t live in that world, which has been made quite clear in the lag between open forum discussions, formal recommendations for change, and progress regarding these initiatives from the SEC.

Many past attendees can speak directly to the inefficiency of these annual forums. Despite the fact that current concerns within the small business and capital formation arenas are forcibly on the table to SEC officials, policymakers, small business advocates, and the general public, little has been done to keep the momentum of these forums up and running. Instead, discussions quickly go stagnant, another year races by with little to no change, and we are left to wonder what the purpose of the full-day event truly was.

This year, however, change may be in the air.

As the small business environment and issues surrounding the specific initiatives listed in the JOBS Act of 2012 – including Title III (retail crowdfunding) and Title IV (known to most as Regulation A+) – are on the verge of demanding clarification on SEC provisions, the organization has little choice but to begin a season of change, further developing the regulations that were mandated by the Act – even if it is well after their anticipated debut.

First, recently two powerful voices and active proponents for JOBS Act advancement were appointed to the previously sleepy SEC Advisory Committee on Small and Emerging Companies. DJ Paul, co-founder of the newly established Crowdfund Intermediary Regulatory Advocates (CFIRA) and CSO of Propellr, along with Sara Hanks, founder and CEO of CrowdCheck and long-standing securities attorney were both informed of their new term positions on the committee to begin immediately.

This comes as a sliver of light in an otherwise dark landscape for the small business community as the SEC’s original initiative for the committee was to act as an active intermediary between policymakers and those in the business community expecting and needing change. The committee has not met since the fall of 2013, so the addition of two active advocates for the small business environment points toward upcoming movement. There is still a question as to who will act as chair for the group, but an announcement on that position is expected by the end of the year.

In addition to movement within an otherwise dormant committee space, a new Congress takes its seat in the upcoming year. This may not seem like a change agent to some, but the hope is that with fresh faces and a new eagerness to impact change, this year’s forum will fizzle out as quickly as those past. Also working in favor of forward momentum of JOBS Act provisions is the fact that the one who holds veto power will be focused more on legacy planning for the remainder of his term – a powerful shift that directs attention toward creating the regulation and clarification so desperately needed for the JOBS Act provisions. These changes in the political landscape should, ideally, lead to movement in the right direction as it relates to economic growth and efficient capital markets.

The Forum’s 2014 Agenda

The Government Business Forum on Small Business Capital Formation will run all day on Thursday, November 20, beginning at 9:00 a.m., and will be held in Washington, D.C. The morning panel sessions will feature a number of prominent speakers while the smaller afternoon breakout sessions will be geared toward creating recommendations for publication within the final report of the forum. The afternoon session topics will include:

  • Definition of Accredited Investor
  • Disclosure Effectiveness for Smaller Reporting Companies
  • Exempt Securities Offerings
  • Secondary Market Liquidity for Securities of Small Businesses

For those located in the D.C. metro areas who wish to attend in person, the forum will be held at 100 F Street, NE, Washington, D.C., and registration is required. The SEC will also be broadcasting the morning sessions live on its website (, and those wishing to participate in the afternoon breakout discussions via phone may do so by pre-registering here, on or before November 14. Please note there is no registration fee for the event.

As the 33rd installment of the Forum on Small Business Capital Formation rapidly approaches, hopes are high that clarification on provisions and forward-moving regulation will be provided after the event. With the combination of new leadership in place, as well as a drastically shifted political focus, it would seem a season of impactful change is upon the small business environment.

A summary of the event will be available on our blog after the forum concludes next week.

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