Regulation Crowdfunding – Part II

[Continued from Regulation Crowdfunding – Part I]

Crowdfunding Requirements for Intermediaries

 The following requirements apply to both broker-dealers and funding portals acting as an intermediary in a transaction involving the sales of securities pursuant to Regulation Crowdfunding (“Regulation CF”):

  • Register with the SEC as a broker or as a funding portal.
  • Register with a self-regulatory organization (“SRO”); the only eligible SRO at present being FINRA.

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Regulation Crowdfunding – Part I

On October 30, 2015, the Securities and Exchange Commission (the “SEC”) voted to adopt Regulation Crowdfunding (“Regulation CF”) under the provisions of Title III of the JOBS Act of 2012 (the “JOBS Act”).  The final rules adopted under Regulation CF became effective on May 16, 2016, with entities wishing to act as broker-dealers or “crowdfunding portals” for such offerings starting the application process with the Financial Industry Regulatory Authority, Inc. (“FINRA”) as early as the end of January.

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