jobs act - crowdfunding

8/13/2019 JOBS Act - Crowdfunding

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Corrected to Conform to Federal Register Version

SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 200, 227, 232, 239, 240 and 249

[Release Nos. 33-9470; 34-70741; File No. S7-09-13]

RIN 3235-AL37

CROWDFUNDING

AGENCY:

ACTION:

SUMMARY:

DATES:

ADDRESSES:

Electronic Comments


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http://www.sec.gov/rules/proposed.shtml

[email protected]

http://www.regulations.gov

Paper Comments

http://sec.gov/rules/proposed.shtml

FOR FURTHER INFORMATION CONTACT:
http://www.sec.gov/rules/proposed.shtmlhttp://www.sec.gov/rules/proposed.shtmlhttp://www.sec.gov/rules/proposed.shtmlmailto:[email protected]:[email protected]:[email protected]://www.regulations.gov/http://www.regulations.gov/http://www.regulations.gov/http://sec.gov/rules/proposed.shtmlhttp://sec.gov/rules/proposed.shtmlhttp://sec.gov/rules/proposed.shtmlhttp://sec.gov/rules/proposed.shtmlhttp://www.regulations.gov/mailto:[email protected]://www.sec.gov/rules/proposed.shtml


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SUPPLEMENTARY INFORMATION:

Table of Contents


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I. Introduction and Background

A. Overview of Crowdfunding

e.g.

e.g.

See, e.g. Crowdfunding and the Federal Securities Laws

See The Rise of Crowdsourcing

Crowdsourcing as a Model for Problem Solving

See Startups seek the wisdom of crowds, available at


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See

See also

Crowdfunding for a Cause: Nonprofits Can Now Hold Fundraisers on Crowdtilt

available at

See, e.g.


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See Start-Ups Look to the Crowd Proceed At Your Peril: Crowdfunding and the

Securities Act of 1933 Crowdfunding or Fraudfunding?Social Networks and the Securities Laws Why the Specially Tailored Exemption Must be Conditioned on

Meaningful Disclosure The New FederalCrowdfunding Exemption: Promise Unfulfilled

See See

See, e.g. Reves v. Ernst & Young SEC v. W.J. Howey

Co.

See


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B. Title III of the JOBS Act

But see Eliminating the Prohibition Against General Solicitation and General Advertising in Rule 506 and Rule 144A Offerings GeneralSolicitation Adopting Release

o See i.e.


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o

o


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C. Approach to Proposed Rules

See

See


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See See

See


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See Crowd-funding dark side: Sometimesinvestments go down drain

See, e.g. Laws Provide Con Artists with Personal Economic Growth Plan

available at

See also This is What a KickstarterScam Looks Like, available at

/ But see Kickstarter spies a sunglass start-up

Crowdfunding: Invested Central raises $120,000


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II. Discussion of Proposed Regulation Crowdfunding

A. Crowdfunding Exemption

1. Limitation on Capital Raised

See See also


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See

See

See

See


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See

See also

available at

Cf.


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See See also See

See

See


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Request for Comment

See


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2. Investment Limitation


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Net Worth Standard for Accredited Investors

See


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both and


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See See also

See

See

See

See

See


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See

See

See See also

See See

See


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Request for Comment


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e.g.

See

See


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3. Transaction Conducted Through an Intermediary

See


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See

See also

id

See

The Wisdom of Crowds

See

See


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See

See, e.g. Use of Electronic Media by Broker-Dealers, Transfer Agents and Investment Advisers for Delivery of Information, Use of Electronic Media Use of Electronic Media

See

See, e.g.


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Request for Comment

See

See

See

See


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e.g.

See


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4. Exclusion of Certain Issuers from Eligibility under Section 4(a)(6)

o

et seq


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See

See See also

See

See


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See e.g.


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Request for Comment

See

See available at

Id


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e.g.

e.g.

See


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B. Requirements on Issuers

1. Disclosure Requirements


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See


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Request for Comment

a. Offering Statement Disclosure Requirements

i. Information about the Issuer and the Offering

See


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(a) General Information about the Issuer, Officersand Directors

o

o

See Id

See


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of any class

See

See


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Request for Comment

e.g.


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(b) Description of the Business

See See

See


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Request for Comment

See


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(c) Use of Proceeds

See

See


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(d) Target Offering Amount and Deadline

See

See

See See also

See

See


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See

Id.


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Request for Comment

See

See See also


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(e) Offering Price

Request for Comment

(f) Ownership and Capital Structure

See (l) See also

See


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See


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Request for Comment

(g) Additional Disclosure Requirements

See See

See

See

See


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See

See

See

See available at


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See

See

See


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See


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Request for Comment

See

See

See

See

See


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See

See See also


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e.g.

e.g.

ii. Financial Disclosure


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Request for Comment


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(b) Financial Disclosures

See

See


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See

See

See See

See also


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See

See

See

See also


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See

See

See

See


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See

See Smaller Reporting Company Regulatory Relief and Simplification

See also SEC Advisory Committee on Smaller Public Companies, Final Report available at

See

See

See


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See

See

Id.

See

See


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See

See


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See

See


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See

See

See


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See

See


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See

Id.

Id.


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See

See

See

See

See


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Request for Comment

e.g.

Id.


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voluntarily

e.g.


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e.g.

See


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e.g.

See


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Request for Comment

See

See


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See

See Basic Inc. v. Levinson TSC Indus., Inc. v. Northway, Inc.

See

See


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Request for Comment

2. Ongoing Reporting Requirements


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See

See

See

See

See


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See

See See also

See

See


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See


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e.g.

e.g.


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e.g.

e.g.

e.g.

e.g.

See

See


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e.g.

See


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e.g.

3. Form C and Filing Requirements

See

et seq.


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See


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See


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See

See

See

Id.

See


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Request for Comment

See e.g.


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4. Prohibition on Advertising Terms of the Offering

See

See

See


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See

See

See

Id.

See

See

See


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See

See

See

See


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See

See See

See

See


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Id. See also Securities Offering Reform


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Request for Comment

e.g.


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5. Compensation of Persons Promoting the Offering

See


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See

See

See

See


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See See also

o


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Request for Comment

See


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6. Other Issuer Requirements

a. Oversubscriptions


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Request for Comment

See

See

Id. See

See

See


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c. Types of Securities Offered and Valuation

See

See

See

See


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See

See

et seq

See


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Request for Comment

e.g.,

See

See


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C. Requirements on Intermediaries

1. Brokers and Funding Portals

See


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See

See

See


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Request for Comment

2. Requirements and Prohibitions

a. Registration and SRO Membership

o

o

See


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i.e.

See

See

Id.


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See

See also

See

o


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See, e.g. o

o

See

Id.

See


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See

See


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b. Financial Interests

See


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See

See See also

See


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Request for Comment

See See also

See id. See


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See


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de minimis

de minimis

de minimis

3. Measures to Reduce Risk of Fraud


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See

See

See

See


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See

See

See See also

See


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See e.g.

See

See


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l

See

See also id.

See


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more than

See

See


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See

See Compare

See


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See id.

See

e.g.,


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Request for Comment

See

See

See

See also Outsourcing,

available at


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See


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4. Account Opening

a. Accounts and Electronic Delivery

See


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See

See Use of Electronic Media Use of Electronic Media for Delivery Purposes

See


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Request for Comment

See

SeeUse of Electronic Media,

See See also

See also Useof Electronic Media Use of Electronic Media for Delivery Purposes


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b.

Educational Materials

See


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See


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See

See


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See

See also

See

See

See


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See

See


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See

See also

See, e.g.

See also But see

See

See

See

See


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Request for Comment


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c. Promoters

See

See


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Request for Comment

See

See

See also


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d. Compensation Disclosure

Request for Comment

See See also

See Study on Investment Advisers and Broker- Dealers: As Required by Section 913 of the Dodd-Frank Wall Street Reform and Consumer Protection Act

Study on Investment Advisers and Broker-Dealers available at


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5. Requirements with Respect to Transactions

a.

Issuer Information


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See

See

See also

e.g.


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Request for Comment

See


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b. Investor Qualification

i. Compliance with Investment Limitations

See See also

See

See See also


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See

See

See


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Request for Comment

ii. Acknowledgement of Risk


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See

See

See


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See See also

See

See

See See, e.g.

See also


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See

See

See

See

See also


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Request for Comment

See See


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See

See

See See See also

See


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See

See

See

See See also Study on Investment Advisers

and Broker-Dealers

See, e.g.


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See


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Request for Comment


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Request for Comment

e. Maintenance and Transmission of Funds

See

See


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Adoption of Rule 15c2-4 under the Securities Exchange Act of 1934

See

See

i.e.

See


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See FDIC Deposit Insurance Coverage

See

See See also


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See

Compare See also

See

See

See

See


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See

See

See

See

See


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non-bona fide sales

See Requirements of Rules 10b-9 and 15c2-4 under the Securities Exchange Act of 1934 Relating to Issuers, Underwriters and Broker-Dealers Engaged in an All or None Offering

Id.

See

See, e.g.


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Request for Comment

See

See, e.g. Baikie & Alcantara, Inc., See also


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f. Confirmation of Transaction

See See also

Id

See

Id.


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See See

See Confirmation of Transactions


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Request for Comment

See

e.g.


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6. Completion of Offerings, Cancellations and Reconfirmations

et seq.


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See

See i.e.

See

See

See

See


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See See, e.g.

See


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See

See

See

See id.

See

See


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See


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Request for Comment

See


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7. Payments to Third Parties


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See

See id.

See

See id.

See id.

See


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See, e.g. Privacy: Alternatives Exist for Enhancing Protection of Personally Identifiable Information Information Security: Protecting Personally Identifiable Information, See also Guide to Protecting the Confidentiality of

Personally Identifiable Information (PII): Recommendations of the National Institute of Standards andTechnology

See


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Request for Comment

See Persons Deemed Not to Be Brokers,

See also

See also


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D. Additional Requirements on Funding Portals

1. Registration Requirement

a. Generally

Compare o

See See also


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See

See

See

See


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See

See


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See

See

See


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o

See


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Request for Comment

b. Form Funding Portal

See

See


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See

See


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See

See id.

See id.


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Request for Comment

See


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c. Fidelity Bond

See

See


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See

See


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Request for Comment

d. Requirements for Nonresident Funding Portals

See


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See

See


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e.g.

See

See available at See

also available at


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Request for Comment

available at


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2. Exemption from Broker-Dealer Registration

See

See

See also o


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See generally

See See also

o o

See

See See also

See See also


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Request for Comment

See See See

also o


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3. Safe Harbor for Certain Activities

See, e.g.

See, e.g

See


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e.g.

See id

See

See id See id.

See

See

See id.


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i.e.

o

o

o

See

See

See

See

See

See


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See

See

See

See

See

See

See


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See

See also

See

See See also

See


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Limiting Offerings

See, e.g.

See


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See

See, e.g.


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See

See

See


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Highlighting Issuers and Offerings

e.g.,

See

See


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Providing Search Functions

See

See

See See also


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Providing Communication Channels

See

See

See


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Advising Issuers

See See

Compare Registration of Municipal Advisors


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Paying for Referrals

See, e.g.

See

See See also


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Compensation Arrangements with Registered Broker-Dealers

See

See


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See also Payments to Unregistered Persons: FINRA Request Comment on Proposed Consolidated FINRA Rule Governing Payments to Unregistered Persons available at

o

See, e.g.,

See


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Denying Access Based on Potential Fraud or Investor

Protection Concerns

Accepting Investor Commitments

See

See See also

See

See


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Request for Comment


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Request for Comment

e.g.

b. Anti-Money Laundering

See See also

See

See et seq.


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See Money Laundering and Terrorist Financing in theSecurities Sector

Id.

Id

Id

Id

Id

See, e.g. Guidance on Obtaining and Retaining Beneficial Ownership Information

The Role of Domestic Shell Companies in

Financial Crime and Money Laundering: Limited Liability Companies available at


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et seq o

See


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See

See, e.g.

See


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See


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Request for Comment


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c. Privacy

See

See

See


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i.e.

i.e.

See Privacy of Consumer Financial Information (Regulation SP)

See Regulation SAM: Limitations on Affiliate Marketing

See Identity Theft Red Flags Rules Identity Theft Red Flags Rules

See

See


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See Identity Theft Red Flags Rules See

See See

See

See

See


259/584

Request for Comment

See

See

See


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5. Records To Be Created and Maintained by Funding Portals

See

See Recordkeeping by Brokers and Dealers

See


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See id

See

See

See


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See

See

See


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See

See See also

See


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See


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See

See

See See See also


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Request for Comment

See generally

See


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E. Miscellaneous Provisions

1. Insignificant Deviations from Regulation Crowdfunding

See


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Request for Comment

See

See

See also


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e.g.

2. Restrictions on Resales

See

See also


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Request for Comment

See

See also Family Offices Family Offices


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See

See


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3. Information Available to States

Request for Comment

See

See

See


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See

See


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See

Id.

See

See

See


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Request for Comment

See id.

See

But see


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e.g.

See

See id.


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5. Scope of Statutory Liability

See

See


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6. Disqualification


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o


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o

o

o

See See also Disqualification Adopting Release

See


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a. Issuers and Certain Other Associated Persons

See

See

See

See

See Disqualification Adopting Release


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i. Covered Persons

See


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See

See

See See also


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ii. Disqualifying Events

(a) Criminal Convictions


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See


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(b) Court Injunctions and Restraining Orders

See Disqualification of Felons and Other Bad Actors from Rule 506 Offerings

See also Disqualification Adopting Release

See


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See

See


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(c) Final Orders of Certain Regulators


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See

Disqualification Adopting Release

See, e.g. o


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i.e.

et seq

See

See


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Steadman v. SEC affd on other grounds


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(d) Commission Disciplinary Orders

See In the Matter of Mitchell M. Maynard and Dorice A. Maynard

See


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(e) Certain Commission Cease-and-Desist Orders


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See

o


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(f) Suspension or Expulsion from SRO Membershipor Association with an SRO Member

e.g.

See SEC v. Ross Swenson v. Engelstad SEC v. N. Am. Research and Dev. Corp. SEC v. Pearson

See

o


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(g) Stop Orders and Orders Suspending theRegulation A Exemption

(h) United States Postal Service FalseRepresentation Orders

See

See


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Request for Comment

See


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e.g.

iii. Reasonable Care Exception

See


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See also


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iv. Waivers

See


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See

See available at Blue Sky Practice for

Public and Private Direct Participation Offerings


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Request for Comment

e.g.

v. Transition Issues

See


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Request for Comment

See

See


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b. Intermediaries and Certain Other Associated Persons


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Request for Comment


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A. Economic Baseline

1. Existing Funding Sources Available to Startups and Small Businesses

e.g.


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See Capital Raising in the U.S.: An Analysis ofUnregistered Offerings Using the Regulation D Exemption, 2009-2012 Ivanov/BauguessStudy available at

See, e.g. The Seven Percent Solution

The Determinants of Underpricing for Seasoned Equity Offers Investment Bank Reputation and the Price and Quality of Underwriting Services

Convertibles and Hedge Funds as Distributors of Equity Exposure


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See also Factors That May Affect

Trends in Regulation A Offerings available at

See General Solicitation Adopting Release


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!"#$ &'(''$)*+, -&../) 0*1*2

3/++$) &'(''$)*+,

4556$) /+74+8$52&)

9$:6*)$1$+25;*.*+,

9$:6*)$1$+29$52)*?"@A$1#2*&+

>$


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$%%4


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+45%-*(.($1


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b. Commercial Loans, Peer-to-Peer Loans and Microfinance

See

The Economics of Small Business Finance: The Roles of Private Equity and Debt Markets in the Financial Growth Cycle See also

available at

See How Do Start-Up Firms Finance Their Assets? Evidence from the

Kauffman Firm Surveys available at See

See 2013 State of Entrepreneurship Address available at


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e.g.

See What Do We Know About the Capital Structure of Privately Held Firms? Evidence fromthe Surveys of Small Business Finance available at

See Id.

available at

et seq

et seq

et seq See Microloan Program, available at

See FY 2013 Congressional Budget Justification And FY 2011 Annual Performance Report 2011 Annual Performance Report available at


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See Putting the S.B.A. Into Perspective available at

See

See

See Peer-to-Peer Lending and Community Development Finance available at

Id.


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Id.

Id.

See Making Microfinance Work: Managing for Improved Performance

See Microfinance Handbook: An Institutional and Financial Perspective

See State of Microcredit Summit Campaign Report 2009


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c. Venture Capitalists and Angel Investors

See Key Data on the Scale of Microlending in the U.S.

Id.

See Recent Stats & Studies available at


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e.g.

e.g.

See

See Financial Contracting Meets the Real World: An Empirical Analysis of Venture Capital Contracts


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d. Current Crowdfunding Practices

See The Importance of Angel Investing in Financing the Growth of Entrepreneurial Ventures

See

See Crowdfunding Industry Report: Market Trends, Composition and Crowdfunding Platforms available at

Id.

Id.


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See Annals of Dubious

Statistics, Crowdfunding Edition available at

See Widely Cited Crowdfunding Market Estimates Are Probably Too Optimistic available at

See .

Id.

Id.

Id.



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3. Survival Rates for Startups and Small Businesses

See AnOverview of the Kauffman Firm Survey: Results from the 2004-2008 Data

available at

See New Lists: Fundamentals and Survival Rates


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4. Market Participants

See Whom You Know Matters: Venture Capital Networks and Investment Performance

See The Venture Capital Secret: 3 Out of 4 Start-Ups Fail

See Firm and Product Life Cycles and Firm Survival

See Business Dynamics Statistics, Data: Firm Characteristics available at .


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a. Issuers

See

See Recent Stats & Studies available at


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See 2011 Annual Performance Report

See

See


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e.g.

See, e.g.

FY 2014 Congressional Budget Justification, 2014 Annual Performance Plan, FY 2012

Annual Performance Report available at


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b. Crowdfunding Intermediaries

See The Dynamics of Crowdfunding: An Exploratory Study available at


340/584

See

Id.

Id. .

See id.

see Meetings with SECOfficials available at


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c. Investors

Id. See Crowdfunding platform ships product samples to potential investors

See Rich Mans Crowd Funding See also Quickly adapting to crowdfunding laws In the Crowdfunding Gold

Rush, This Company Has a Rare Edge


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d.

Other Capital Providers, Broker-Dealers and Finders inPrivate Offerings

See Crowdfunding Why Angels,

Venture Capitalists And Private Equity Investors All May Benefit


343/584

See Report and Recommendations of the Task Force on Private Placement Broker-Dealers,

See Ivanov/Bauguess Study


344/584

e.g.

B. Analysis of Proposed Rules

See, e.g.


345/584

1. Broad Economic Considerations


346/584

e.g.

See

See, e.g. Corporate Investment and Stock Market Listing: A Puzzle? available at


347/584


348/584

See

See


349/584

See Market Microstructure of the Pink Sheets

Asset Pricing in the Dark: The Cross Section of OTC Stocks

See Down and Out in the Stock Market: The Law and Finance

of the Delisting Process See

Off But Not Gone: A Study of NASDAQ Delistings

available at


350/584

e.g.

See


351/584

e.g.


352/584

e.g.

See, e.g. Deutsche Bank Microcredit Development Fund, Inc.


353/584

2. Crowdfunding Exemption

a. Limitation on Capital Raised

See also


354/584

b. Investment Limitations

See See also


355/584

c. Issuer Eligibility

See

See The Risk and Return of Venture Capital

See


356/584

See See also

See

See


357/584

3. Issuer Requirements


358/584

See

See

See See also

See See also


359/584


360/584

See See also

See


361/584

See Economic Consequences of Financial Reporting and Disclosure Regulation: A Review and Suggestions for Future Research

available at


362/584

See See also

See

See


363/584

b. Financial Condition and Financial Statement Disclosure

Requirements


See See also


364/584


365/584

See

See

See


366/584

See

But see

See See also

See


367/584

Id

See

See

See


368/584


369/584

See

See


370/584

c. Issuer Filing Requirements

See

See

See See also

See See also


371/584

See See also


372/584


373/584

See

See See also

See See also


374/584

d. Advertising Notice of Offering

See

See See

See


375/584

e. Compensation of Persons Promoting the Offering

See See also

See

See See also


376/584

f. Oversubscription and Offering Price

See See also

See

See See also


377/584

e.g.

h. Restrictions on Resales

e.g.

See l

See

See See also


378/584

4.

Intermediary Requirements

See .


379/584

See


380/584

See

See available at

Crowdfunding Portals availableat


381/584


382/584

e.g.


383/584

See

See

See


384/584


385/584

Estimated Costs of Intermediaries That Register As Brokers

Estimated CostsInitial Cost (Year 1) Ongoing Cost per Year

Subtotal $770,000 $270,000

Estimated Costs of Intermediaries That Register As Funding Portals


Subtotal $417,000 $90,000

See

See

See


386/584

Estimated Incremental Costs of Intermediaries Already Registered as Brokers


Subtotal $295,000 $70,000

See

See


387/584

See

See Jumpstart Our Business Startups Act: FINRA Requests Comment on Proposed Regulation of

Crowdfunding Activities available at

See


388/584

a. Disclosure and Dissemination Requirements

See

See


389/584


390/584

See Policy Issues Raised by Structured Products available at

See


391/584

See


392/584

i.e.,

See

See


393/584

See


394/584

See

See

See


395/584

b. Measures to Reduce the Risk of Fraud and Limitations


396/584

See


397/584

See

See


398/584


399/584

See


400/584

See

See


401/584

See

See


402/584

5. Additional Funding Portal Requirements

See


403/584

i.e.


404/584

See See also


405/584

e.g.

a. Safe Harbor for Certain Activities

See


406/584

e.g.

See

See


407/584

See

See

See


408/584

See

See

See


409/584

b. Compliance Requirements

See

See

See


410/584

See

See See also

See

See


411/584

See


412/584

See

See


413/584

6. Insignificant Deviations

See


414/584

7.

Relationship with State Law


415/584


416/584


417/584

9. Disqualification

a. Issuers

See See also



418/584

See See also


419/584

See See also


420/584

e.g.



421/584

b. Intermediaries

See


422/584

C. Request for Comment


423/584


424/584

e.g.

i.e.


425/584


426/584

o e.g.

o

o

o


427/584

IV. Paperwork Reduction Act

A. Background

et seq.


428/584

B. Estimate of Issuers and Intermediaries

1. Issuers

2. Intermediaries that are Registered Brokers

See

See id.


429/584

3. Funding Portals

See, e.g.

See

Id.

Id


430/584

C. Estimate of Burdens

1. Issuers

a. Form C: Offering Statement and Progress Update

e.g.

See

See

See


431/584

See

See

See

See


432/584

See


433/584

b. Form C-AR: Annual Report

See

See

See


434/584

c. Form C-TR: Termination of Reporting

d. Form ID Filings

See

See

See


435/584

2. Brokers and Funding Portals

a.

Registration Requirements

i. Time Burden

See

See


436/584


437/584


438/584


439/584

i.e.

ii. Cost

See Revised Fees: Changes to Advertising, Corporate Financing, New Membership andContinuing Membership Application, Central Registration Depository and Branch Office Annual

Registration Fees available at


440/584


441/584

b. Development of Intermediary Platform

i. Time Burden

See


442/584

ii. Cost


443/584

c. Measures to Reduce the Risk of Fraud

i. Time Burden

See


444/584

ii. Cost


445/584

e.g.

See, e.g. Background Check FAQ: Frequently Asked Questions available at


446/584

d. Account Opening: Accounts and Electronic Delivery

i. Time Burden

See


447/584

ii. Cost

e. Account Opening: Educational Materials

i. Time Burden

See


448/584

ii. Cost

See, e.g. What Is the Cost of Video Production for the Web? available at


449/584

f. Account Opening: Promoters

i. Time Burden

See


450/584

ii. Cost

g. Issuer Disclosures to be Made Available

i.

Time Burden

See


451/584

ii. Cost

h. Other Disclosures to Investors and Potential Investors

i. Time Burden


452/584

ii. Cost

See

See


453/584

i. Maintenance and Transmission of Funds

i. Time Burden

See


454/584

ii. Cost

j. Fidelity Bond

i.

Time Burden

See


455/584

ii. Cost

k. Compliance: Policies and Procedures

i. Time Burden

ii. Cost


456/584

l. Compliance: Anti-Money Laundering

m. Compliance: Privacy

i. Time Burden

See


457/584


458/584


459/584

ii. Cost

n. Records to be Made and Kept by Funding Portals

i. Time Burden

See

available at


460/584

ii. Cost


461/584

D. Collections of Information are Mandatory


462/584

E. Confidentiality

F. Retention Period of Recordkeeping Requirements

G. Request for Comment

et seq

See


463/584

V. Small Business Regulatory Enforcement Fairness Act


464/584

VI. Initial Regulatory Flexibility Act Analysis

A. Reasons for the Proposed Actions


465/584

B. Objectives

C. Small Entities Subject to the Proposed Rules


466/584

D. Projected Reporting, Recordkeeping and other Compliance Requirements

See


467/584


468/584

E. Duplicative, Overlapping or Conflicting Federal Rules

F Significant Alternatives


469/584

1. Issuers

2. Intermediaries

See


470/584

G. Request for Comment

VII. STATUTORY AUTHORITY AND TEXT OF PROPOSED REGULATION

et

seq.

et seq.

List of Subjects


471/584

PART 200 ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION ANDREQUESTS

Subpart A Organization and Program Management

l


472/584

200.30-1 Delegation of authority to Director of Division of Corporation Finance.

et seq

PART 227REGULATION CROWDFUNDING, GENERAL RULES ANDREGULATIONS


473/584

Authority

SUBPART A General

227.100 Crowdfunding exemption and requirements.

Exemption


474/584

Instruction 1 to paragraph (a)(2)

Instruction 2 to paragraph (a)(2).

Instruction 3 to paragraph (a)(2).


475/584

et seq



Applicability


476/584

Issuer issuer

Instruction to paragraph (c)

Platform platform

SUBPART B Requirements for Issuers

227.201 Disclosure requirements.


477/584

Instruction to paragraph (b) officer


478/584

Instruction to paragraph (i)


479/584


480/584

Instruction to paragraph (q)


481/584

Instruction to paragraph (r)


482/584

Instruction to paragraph (s)


483/584

Instruction 1 to paragraph (t)




484/584







485/584



Instruction to paragraph (u)


486/584

227.202 Ongoing reporting requirements.

227.203 Filing requirements and form.

Offering Statement.


487/584

Instruction to paragraph (a)(1)

Amendments to Offering Statement.


488/584

Instruction to paragraph (a)(2).

Progress Updates.




489/584

Instruction 1 to paragraph (a)

Instruction 2 to paragraph (a)

Form C: Annual Report

Instruction to paragraph (b)(1)


490/584

227.204 Advertising.

Instruction to 227.204. terms of the offering

227.205 Promoter compensation.


491/584

SUBPART C Requirements for Intermediaries

227.300 Intermediaries.

Requirements

o

o


492/584

Prohibitions

financial interest in an

issuer

Definitions

Associated person of a funding portal person associated with a funding portal

o

Funding portal


493/584

Intermediary

o

Investor

Self-regulatory organization SRO

227.301 Measures to reduce risk of fraud.


494/584

227.302 Account opening.

Accounts and Electronic Delivery


495/584

Educational Materials


496/584

Promoters


497/584

Compensation Disclosure

227.303 Requirements with respect to transactions.

Issuer Information

Investor Qualification


498/584

et seq

Communication Channels


499/584

Notice of Investment Commitment

Maintenance and Transmission of Funds


500/584

provided that


501/584

Confirmation of Transaction

227.304 Completion of offerings, cancellations and reconfirmations.

Generally


502/584

Early Completion of Offering

provided that:

Cancellations and Reconfirmations Based on Material Changes


503/584

Return of Funds If Offering Is Not Completed

227.305 Payments to third parties. Prohibition on Payments for Personally Identifiable Information

Certain permitted payments

provided that


504/584

SUBPART D Funding Portal Regulation

227.400 Registration of funding portals.

Registration

o

o

Amendments to Registration

Successor Registration


505/584

provided however

Withdrawal

Applications and Reports

Fidelity Bond


506/584

o

o

Nonresident Funding Portals

Definition nonresident funding portal

Power of Attorney


507/584

Access to Books and Records

Certification and Opinion of Counsel


508/584

Amendments

227.401 Exemption.

o

227.402 Conditional safe harbor.

General


509/584

Permitted Activities

provided


510/584

provided


511/584


512/584


513/584


514/584

227.403 Compliance.

Policies and Procedures

Anti-Money Laundering

Privacy

Inspections and Examinations

227.404 Records to be made and kept by funding portals.

Generally


515/584

Organizational Documents


516/584

Format

Third Parties


517/584

Review of Records

Financial Recordkeeping and Reporting of Currency and Foreign Transactions

et seq.

SUBPART E Miscellaneous Provisions

227.501 Restrictions on resales.


518/584

accredited investor

member of the family of the purchaser or the

equivalent

Instruction to paragraph (c) spousal

equivalent

227.502 Insignificant deviations from a term, condition or requirement of RegulationCrowdfunding.


519/584

227.503 Disqualification


520/584

Instruction to paragraph (a)(3) Final order


521/584

o o


522/584

et seq


523/584

Instruction to paragraph (b)(4)

Instruction to paragraph (d)


524/584

PART 232 REGULATION S-T GENERAL RULES AND REGULATIONS FORELECTRONIC FILINGS

232.101 Mandated electronic submissions and exceptions.


525/584

PART 239 FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

239.900 Form C.

et seq.

Note: The text of Form C will not appear in the Code of Federal Regulations.

UNITED STATES


Washington, D.C. 20549

FORM C

UNDER THE SECURITIES ACT OF 1933

[ ] Form C: Offering Statement[ ] Form C-U: Progress Update: _______________________________________________[ ] Form C-A: Amendment

[ ] Check box if Amendment is material and investors will have five business days toreconfirm

[ ] Form C-AR: Annual Report[ ] Form C-TR: Termination of Reporting


526/584

GENERAL INSTRUCTIONS

I. Eligibility Requirements for Use of Form C

II. Preparation and Filing of Form C


527/584

et seq.

III. Information to be Included in the Form

Item 1. Offering Statement Disclosure Requirements

Item 2. Legends


528/584

Item 3. Annual Report Disclosure Requirements

SIGNATURE


529/584

Instructions.

PART 240 - GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACTOF 1934


530/584

240.12g-6 Exemption for securities issued pursuant to Section 4(a)(6) of the SecuritiesAct of 1933.

l held

of record

PART 249 FORMS, SECURITIES EXCHANGE ACT OF 1934

249.1500 Form Funding Portal

et seq.

Note: The text of Form Funding Portal will not appear in the Code of Federal Regulations.

UNITED STATES


531/584


Washington, D.C. 20549

FORM FUNDING PORTAL

UNDER THE SECURITIES EXCHANGE ACT OF 1934

WARNING:

funding portal SEC funding portals

funding portals SEC

Item 1 Identifying Information

funding portal

funding portal business name


532/584

applicant funding portal

applicant

foreign financial regulatory authority applicant

foreign financial regulatory authority applicant

Foreign Financial Regulatory Authority


533/584

Item 2 Form of Organization

applicant

applicant i.e. applicant

Item 3 Successions

applicant

funding portal applicant funding portal

Funding Portal

Funding Portal SEC

succession successor

Item 4 Control Persons

person controls applicant controls applicant applicant controls


534/584

.

Item 5 Disclosure Information

applicant applicant

applicant

applicant

A. Criminal Action Disclosure

applicant associated person

felony charge felony

charged felony



535/584

The response to the following question may be limited to charges that arecurrently pending:

B. Regulatory Action Disclosure

SEC

found applicant associated person

found applicant associated person involved SEC CFTC


investment related

order applicant associated person investment-related


536/584

applicant associated person ordered applicant associated person

foreign financial regulatory authority


found applicant associated person involved investment-related


investment-related

order applicant associated person investment-related

applicant applicant applicant




537/584

applicant associated person involved

SEC

applicant associated person investment-related

applicant associa