Less than a third of CFA Institute members in the U.S. are in favor of the so-called JOBS Act which has already passed the House and is now under consideration of the Senate. That's according to a survey by the CFA Institute of Chartered Financial Analysts and investment professionals. Just 29 percent of members think the Senate should pass the bill as is, and 63 percent believe that the proposed bill would create additional gaps in investor protection and transparency.
In addition, 59 percent of members think the bill would decrease an investor’s ability to make informed investment decisions.
The proposed “Jumpstart Our Business Startups” Act would ease regulations and disclosure requirements for companies looking to go public. CFA Institute outlined several concerns about the bipartisan bill in a letter to Sen. Charles Schumer (D-N.Y.), including a proposal to permit brokerage firms analysts to write and distribute research on companies whose IPO shares their firms are underwriting. The letter also details additional safeguards needed to balance the capital needs of small companies and investor protection.
“Allowing analysts to evaluate IPOs underwritten by their own firms is a return to the kind of conflicted research that decimated investor confidence after the burst of the dot-com bubble,” said Kurt Schacht, CFA, managing director for market policy at CFA Institute. “And, the JOBS Act requires no visible warning for investors on SEC filings and financial updates to note the companies are not subject to normal financial reporting rules."
The CFA Institute JOBS Act member survey was conducted online from March 13th to the 16th, with 491 U.S. members.
The opinion of CFA Institute members reflects the organization’s mission to lead the investment profession globally by setting the highest standards of ethics, education and professional excellence. “While there may be economic benefits to increasing opportunity for small companies to access the capital markets for equity and debtfunding, we believe that goal must be balanced with the transparency needs of investors,” Schacht said.