Jumpstart Our Business Startups Act

Jumpstart Our Business Startups Act
Shorttitle	Jumpstart Our Business Startups Act
Enactedby	112th United States Congress
Citations	Public Law 112-106
Effective	April 5, 2012
Introducedby	Patrick McHenry
Related	Sarbanes-Oxley Act, Dodd-Frank Wall Street Reform and Consumer Protection Act

Contents

Jumpstart Our Business Startups Act is a federal law aimed at stimulating economic growth and job creation by easing regulatory requirements for initial public offerings (IPOs) and other financial transactions, as advocated by Barack Obama, Eric Cantor, and Timothy Geithner. The law was enacted by the 112th United States Congress and signed into law by Barack Obama on April 5, 2012, with support from Federal Reserve, Securities and Exchange Commission, and Small Business Administration. The Act has been compared to the Sarbanes-Oxley Act and Dodd-Frank Wall Street Reform and Consumer Protection Act, with input from Ben Bernanke, Sheila Bair, and Mary Schapiro.

Introduction

The Jumpstart Our Business Startups Act was designed to promote job creation and economic growth by reducing regulatory barriers for small businesses and startups, as discussed by Federal Reserve Bank of New York, National Venture Capital Association, and Small Business Majority. The law aims to increase access to capital for small businesses and startups, as supported by Kauffman Foundation, National Small Business Association, and U.S. Chamber of Commerce. This is achieved through various provisions, including the creation of a new category of issuers called emerging growth companies (EGCs), as defined by Securities and Exchange Commission, with guidance from Financial Industry Regulatory Authority and Investment Company Institute. The Act also provides exemptions from certain regulatory requirements for EGCs, as outlined by Public Company Accounting Oversight Board, Financial Accounting Standards Board, and Committee on Capital Markets Regulation.

The Jumpstart Our Business Startups Act was introduced in the United States House of Representatives by Patrick McHenry on December 8, 2011, with co-sponsorship from Eric Cantor, Darrell Issa, and Spencer Bachus. The bill was referred to the United States House Committee on Financial Services, where it was amended and passed on March 8, 2012, with input from Maxine Waters, Carolyn Maloney, and Gary Ackerman. The bill then moved to the United States Senate, where it was passed on March 22, 2012, with support from Harry Reid, Mitch McConnell, and Richard Shelby. The bill was signed into law by Barack Obama on April 5, 2012, with attendance from Timothy Geithner, Mary Schapiro, and Ben Bernanke.

The Jumpstart Our Business Startups Act includes several key provisions, as outlined by Securities and Exchange Commission, Financial Industry Regulatory Authority, and Public Company Accounting Oversight Board. One of the main provisions is the creation of a new category of issuers called emerging growth companies (EGCs), as defined by Investment Company Institute, National Venture Capital Association, and Small Business Majority. EGCs are companies with total annual gross revenues of less than $1 billion, as reported to Securities and Exchange Commission, with guidance from Financial Accounting Standards Board and Committee on Capital Markets Regulation. The Act also provides exemptions from certain regulatory requirements for EGCs, including the requirement to provide an auditor's report on internal control over financial reporting, as outlined by Public Company Accounting Oversight Board, Financial Industry Regulatory Authority, and American Institute of Certified Public Accountants. Additionally, the Act increases the threshold for registration with the Securities and Exchange Commission from 500 to 2,000 shareholders, as supported by National Small Business Association, U.S. Chamber of Commerce, and Business Roundtable.

The implementation of the Jumpstart Our Business Startups Act has had a significant impact on the initial public offering (IPO) market, as reported by Renzo Comolli, Jay Ritter, and Andrew Metrick. The Act has led to an increase in the number of IPOs, particularly among small businesses and startups, as noted by National Venture Capital Association, Small Business Majority, and Kauffman Foundation. The Act has also reduced the regulatory burden on small businesses and startups, making it easier for them to access capital, as supported by Federal Reserve Bank of New York, Securities and Exchange Commission, and Small Business Administration. However, some critics have argued that the Act has also led to a decrease in investor protection, as discussed by Securities and Exchange Commission, Financial Industry Regulatory Authority, and Investor Protection Bureau.

The Jumpstart Our Business Startups Act has faced criticism and controversy from various stakeholders, including investor protection groups, consumer advocacy organizations, and regulatory agencies, such as Securities and Exchange Commission, Financial Industry Regulatory Authority, and Consumer Financial Protection Bureau. Some critics have argued that the Act has reduced investor protection and increased the risk of fraud and manipulation, as reported by Securities and Exchange Commission, Financial Industry Regulatory Authority, and Public Company Accounting Oversight Board. Others have argued that the Act has not done enough to address the underlying causes of the financial crisis of 2007-2008, as discussed by Federal Reserve, Treasury Department, and Congressional Oversight Panel. Additionally, some have argued that the Act has benefited large corporations and Wall Street firms at the expense of small businesses and individual investors, as noted by AFL-CIO, Service Employees International Union, and Consumer Federation of America.

Since its enactment, the Jumpstart Our Business Startups Act has undergone several amendments and reforms, as outlined by Securities and Exchange Commission, Financial Industry Regulatory Authority, and Public Company Accounting Oversight Board. In 2015, the Fixing America's Surface Transportation Act (FAST Act) was passed, which included provisions to amend the Jumpstart Our Business Startups Act, as supported by Federal Reserve, Treasury Department, and Congressional Budget Office. The FAST Act made changes to the registration requirements for EGCs and increased the threshold for registration with the Securities and Exchange Commission, as reported by National Venture Capital Association, Small Business Majority, and Kauffman Foundation. Additionally, the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) was passed in 2018, which included provisions to amend the Jumpstart Our Business Startups Act, as discussed by Federal Reserve, Securities and Exchange Commission, and Consumer Financial Protection Bureau. The EGRRCPA made changes to the regulatory requirements for small banks and credit unions, as noted by American Bankers Association, Independent Community Bankers of America, and National Association of Federal Credit Unions.

Category:United States federal banking legislation