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FINRA Requests Comments on Proposed Regulation of Equity Crowdfunding
Financial Industry Regulatory Authority (FINRA), the largest independent regulator of securities firms doing business in the United States, invites public comment on the appropriate scope of FINRA rules that should apply to firms engaging in equity crowdfunding activities, either as funding portals or as brokers. Under crowdfunding exemptions of the JOBS Act, intermediaries performing crowdfunding on behalf of entrepenuers and startups must register with the Securities and Exchange Commission (SEC) as a funding portal or broker. They also are mandated to register with an applicable self-regulatory organization (SRO) such as FINRA.
The comments should address the specific rules that a funding portal must adopt to become a FINRA registered funding portal. Comment areas of particular interest include possible rules concerning supervision, advertising, anti-money laundering, fraud and manipulation, and just and equitable principles of trade. FINRA also solicits comments on the application of existing FINRA rules for crowdfunding activities of FINRA registered broker-dealers. Comments must be received by August 31, 2012. Read the notice...