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FINRA Guidelines: How to Apply as a New Funding Portal?

January 29, 2016, republished [original content]

FINA has published guidelines for firms to register as funding portals for Title III, Regulation Crowdfunding.

For your firm to become a registered funding portal with FINRA, your firm must complete the following steps.

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FINRA Funding Portal Rules and Related Forms Approved by SEC

January, 29, 2016, republished [original]

Executive Summary

The SEC approved FINRA’s proposed Funding Portal Rules and related forms for SEC-registered funding portals that become FINRA members pursuant to the crowdfunding provisions of Title III of the JOBS Act and the SEC’s Regulation Crowdfunding. FINRA’s Funding Portal Rules will become effective on January 29, 2016, which aligns with the effective date of the SEC’s registration rules under Regulation Crowdfunding. This Notice provides a brief overview of the new Funding Portal Rules and provides information for prospective funding portals that plan to apply for FINRA membership.

The text of the Funding Portal Rules is available on FINRA’s website. The related forms are available for reference in the Appendices. (As discussed further in this Notice, prospective funding portals must file all forms electronically through FINRA’s Firm Gateway. The forms will be accessible on Firm Gateway effective January 29, 2016.)

Questions regarding this Notice should be directed to:

Alissa Robinson, Director, Membership Application Program, at (212) 858-4764; or
Adam Arkel, Associate General Counsel, Office of General Counsel, at (202) 728-6961.
Click here to see more.

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FINRA Extends Review Period of Proposed Funding Portal Rules

As of December 9, 2015, FINRA extended the review period for its proposed funding portal rules to January 26, 2016. The new rules were promulgated pursuant to the Jumpstart Our Business Startups Act 2012 (JOBS Act) which “prohibits funding portals from a variety of activities, including offering investment advice or recommendations, soliciting transactions for securities displayed on their websites, compensating employees for securities solicitations, and holding investor funds or securities.” The proposed rules under review are (i) funding portal rules 100, 110, 200, 300, 800, 900 and 1200; (ii) related forms; and (iii) FINRA Rule 4518 (“Notification to FINRA in Connection with the JOBS Act”).

See: FINRA’s Extension of SEC Review Period.

The State of Equity Based Crowdfunding

Washington, D.C.,

August 24, 2014, 700+ days after the JOBS Act was signed into legislation, the SEC still has not released the final rules for Title III: Regulation Crowdfunding.

Over one year ago, February 19, 2013, the nation’s principal leaders and experts on equity and debt‐based financing providing an in‐depth review of the extensive build out and preparation that has taken place to help entrepreneurs’ access capital through online platforms, while protecting the investors who will finance these enterprises. The group touched upon the global advancement of equity‐based crowdfunding, the significant challenges entrepreneurs still face in accessing capital and why it is vitally important that the SEC finalize JOBS Act rule makings.

Watch the Press Conference:

 

Moderator and Host: Karen Kerrigan, President & CEO, SBE Council; Panel of Experts: Sherwood Neiss & Jason Best, architects of the crowdfund investing framework that became law through the JOBS Act and Principals of Crowdfund Capital Advisors; Candace Klein, Founder, Bad Girl Ventures and SoMoLend; Ryan Feit, Co‐Founder, SeedInvest; Vince Molinari, President, GATE Technologies; Sara Hanks, CEO, CrowdCheck; Chris Tyrell, Nehemiah Investments; Kim Wales, Founder of Wales Capital and Chair of the Crowdfunding Professional Association [introduced at 25 minute mark]; Judy Robinett, Entrepreneur, Advisor to Early Stage Companies; Doug Ellenoff, Ellenoff, Grossman & Schole, LLP; Chance Barnett, Founder, Crowdfunder

SEC and FINRA Released Proposed Final Rules for Title III

Today, October 23, 2013 marks an exciting day for the alternative class of issues for Crowdfund Investments.

The Securities and Exchange Commission (SEC), unanimously voted during an impromptu scheduled Sunshine Meeting to release the Proposed Final Rules for Title III of the Jumpstart Our Business Startup Act (JOBS Act). It was noted that FINRA would also released Proposed Rules for Funding Portals and Form FP-NMA for public comment.  This move is in the right direction to begin putting in place mechanisms that create jobs and spur on capital formation for small emerging business as the JOBS Act was intended, given that unemployment nationally remains high at 7.2%. The proposal as outlined in the meeting included very similar rules to that which is currently in Draft Proposal.

In addition to ensuring the investor protections are in place for the crowd; the rules provide for methods in which the issuers and intermediaries will be able to conduct business.

It was noted that investors should be protected and have confidence that the market being created knows how to price the securities while being diligent in helping to prevent against fraudulent activities. Capital formation is a global process and when approached objectively, capital formation enhances confidence, promotes integrity and fosters market transparency. The criticality of each business owner, investor and intermediary to read and comment on the proposed rules will set the foundation for the development of this burgeoning Crowdfund Investing industry.

Along with investor protections being at the forefront in all comments, Commissioner Stein called for specific comments in three areas:

 

1. How much should an investor be able to invest? Which method should be used to determine such an answer, Income versus NET worth test?

2. Should non-US based Funding Portals be permitted to conduct business in the USA by registering with the SEC and FINRA?

3. What should Issuers responsibility be for tracking securities holder’s records? Specifically, what role could third party service providers offer to manage record holder information.

What should the public expect in the coming days?

 

1. The SEC will issue proposed rules for public comment along with 295 questions that have to be addressed by the public through the letter writing process.

2. FINRA will issue proposed rules for public comment as related to Intermediaries.

Note that the public comment period in each instance for FINRA and the SEC should be 90 days from the day the Final Proposed Rules are listed in the Federal Register in the case of the SEC.

For more information on the JOBS Act, Title I through VII, please contact Wales Capital, 212-736-6884, info@walescapital.com.

Feliciano Center for Entrepreneurship – Crowdfunding

On Friday, September 20, 2013,  the Feliciano Center for Entrepreneurship will host an event with expert panelist on Crowdfunding – Latest Insight on Implementation of the JOBS Act – which will include crowdfunding laws and discussions will cover the series of regulatory changes happening this fall intended to make it easier for early-stage companies to raise capital.

The Feliciano Center for Entrepreneurship was created to enhance entrepreneurship education at Montclair State University by creating an environment where students unleash their talent for creativity, innovation and entrepreneurial drive.  This environment will provide students the opportunity to create and develop ideas that turn into real products or services and ultimately pitch those products and services to successful entrepreneurs.  Students will become entrepreneurs.

Speakers scheduled are: Zak Cassady-Dorion, partner, Crowdfund Capital Advisors; Kim Wales, founder of www.Wales Capital.com, in Manhattan, and board member of Crowdfunding Intermediary Regulatory Advocates; Jonathan Sandlund, founder of www.thecrowdcafe.com; Douglas Ellenoff, member Ellenoff Grossman & Schole, a law firm with offices in Manhattan; and Daryl Bryant, founder of Startup Valley.

OSC Staff Consultation Paper 45-‐710 Consideration

On December 14, 2012, the Ontario Securities Commission (OSC) published the OSC Staff Consultation Paper 45-710 Considerations for New Capital Raising Prospectus Exemptions. The Consultation Paper sets out four concept ideas for new prospectus exemptions in Ontario, together with a number of specific consultation questions. The concept ideas are: a concept for an exemption to allow crowdfunding subject to limits for issuers and retail investors, a concept for an offering memorandum exemption, a concept for an exemption based on an investor’s investment knowledge, and a concept for an exemption based on an investor receiving advice from a registrant.

Wales Capital participated in a forum along with other industry thought leaders such as Crowdfund Capital Advisors, SomoLend, Arctic Island, GATE Technologies, Nehemiah Investments, and Ellenoff Grossman & Schole, LLP.

Subsequently, Wales Capital provided comment letters to the OSC for consideration as related to a). Investment Size; b). Oversubscription; c). Two Business Day “cooling period”; d). Revenue Models; e). Rescission Period (Withdrawal Rights).

Read Comment Letters Here

Top 10 Most Influential in Equity Crowdfunding

Top 10 Most Influential in Equity Crowdfunding (via SBWire)

Omaha, NE — (SBWIRE) — 03/29/2013 — As Equity Crowdfunding is sitting at a standstill it will take an army of people to keep the momentum moving forward to get the laws passed and everyone on the same page. Equity Crowdfunding is coming up almost a year since the signing of the JOBS Act by president…

Bloomberg talks Crowdfunding with Kim Wales

Feb. 19 (Bloomberg) — On today’s “Money Moves,” Bloomberg Television focuses on alternative assets and places where investors are investing their money outside of the traditional stock and bond markets. Live with Kim Wales, the founder of Wales Capital, a strategic business advisory firm and Candace Klein, founder of SomoLend, a debt based crowdfunding platform.

Kim is the Chair of the Crowdfunding Professional Association (www.cfpa.org).  Candace Klein is the Co-Chair of the Crowdfund Intermediary Regulatory Advocates (www.cfira.org)

(Source: Bloomberg)

Watch live:

Jason Best at TEDx San Miguel de Allende on Crowdfund Investing

Published on Jan 7, 2013

Jason Best, one of the innovators of the crowdfunding model,
investigates why it has been so successful and suggests ways that it
will transform entrepreneurial endeavors in the future, thus
facilitating a new wave of startups and technologies.

http://www.youtube.com/watch?v=uI_5a7jG7Ss&feature=youtu.be&goback=%252Egde_4615069_member_208953938

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