FINRA Allows Prospective Crowdfunding Portals to Voluntarily Provide Information | Practical Law

FINRA Allows Prospective Crowdfunding Portals to Voluntarily Provide Information | Practical Law

FINRA issued a voluntary interim form that prospective crowdfunding portals can use to provide information to FINRA. FINRA will use the information to aid it in developing rules specific to crowdfunding portals, as required by the JOBS Act.

FINRA Allows Prospective Crowdfunding Portals to Voluntarily Provide Information

Practical Law Legal Update 3-523-5332 (Approx. 3 pages)

FINRA Allows Prospective Crowdfunding Portals to Voluntarily Provide Information

by PLC Corporate & Securities
Published on 11 Jan 2013 • USA (National/Federal)
FINRA issued a voluntary interim form that prospective crowdfunding portals can use to provide information to FINRA. FINRA will use the information to aid it in developing rules specific to crowdfunding portals, as required by the JOBS Act.
On January 10, 2013, FINRA issued a voluntary Interim Form for Funding Portals. Prospective crowdfunding portals may use the form to submit information regarding their businesses to FINRA. FINRA intends to use information it collects as it and the SEC develop rules implementing the crowdfunding provisions of the JOBS Act.
The interim form asks prospective crowdfunding portals to provide information, which will be treated as confidential, about their:
  • Ownership.
  • Funding.
  • Management.
  • Business model and relationships.
  • Any additional information or documents the prospective funding portals believe would be helpful.
According to FINRA, crowdfunding portals will not be bound by the responses provided on the interim form. FINRA will issue a final funding portal application once final crowdfunding rules are adopted.
The issuance of the interim form follows FINRA's announcement last July that it was accepting public comments on the appropriate scope of future rules governing crowdfunding portals under the JOBS Act (see Legal Update, FINRA Seeks Public Comment in Advance of Proposing JOBS Act Crowdfunding Rules).
For more on the interim form, see FINRA's rule change to adopt the interim form and the related SEC notice. For more information on crowdfunding under the JOBS Act, see Practice Note, JOBS Act: Crowdfunding Summary.