On January 10, 2013, FINRA issued a call to all prospective crowdfunding portals asking them to voluntarily submit information regarding their business. This information will help FINRA develop rules relating to crowdfunding portals. The information provided is not bounding on the portals. Once the SEC and FINRA issue final rules regarding the portals, all applicants will be asked to apply for FINRA membership and complete the final funding portal application form.
The interim form asks the portals about their ownership, funding, management, business models and relationships, and any other information that may be useful to FINRA in its rule-making. The final question asks the tough questions mandated by the JOBS Act: how the portals intend to address investor education, take measures to reduce the risk of fraud, ensure adherence to the aggregate selling limits and protect the privacy of information collected from the investors. The submitted information will be kept confidential.
It looks like it will be a while before we see any final rules on crowdfunding from the SEC or FINRA. For an opinion, check out Compliance Building's blog post on the same subject.
This article is not a legal advice, and was written for general informational purposes only. If you have questions or comments about the article or are interested in learning more about this topic, feel free to contact its author, Arina Shulga. Ms. Shulga is the founder of Shulga Law Firm, P.C.