U.S. securities regulators are seeking information from firms that plan to operate crowdfunding portals, as they set the rules for these entities.
The Financial Industry Regulatory Authority (FINRA) Thursday issued a voluntary form that solicits information from prospective crowdfunding portals. It says those intending to become a funding portal may voluntarily submit information regarding their business, which will help it develop rules specific to crowdfunding portals.
It asks prospective funding portals to provide information including: ownership; funding; management; and, business model and relationships. FINRA is also asking prospective portals to supply any additional information that they believe would be helpful to the rulemaking process.
FINRA and the US Securities and Exchange Commission (SEC) are currently working on the rules that should apply to funding portals. It says that once they have adopted funding portal rules, FINRA will issue a final funding portal application. In applying for membership, crowdfunding portals will not be bound by the responses provided on the interim form published today, it notes.
“Crowdfunding portals that file this form will provide FINRA with important information regarding portal business models, which will inform our rulemaking,” said Thomas Selman, executive vice president, regulatory policy, at FINRA.
Last year, FINRA solicited comments on the specific rules it should adopt for registered funding portals that become FINRA members. It has also asked for comment on the application of existing rules to broker-dealers engaging in crowdfunding activities.