FINRA Releases Reg CF FAQs

FINRA Reg CF - Frequently Asked Questions (FAQs) on Regulation Crowdfunding

On December 20, 2023 FINRA published a set of FAQs on Regulation Crowdfunding for the guidance of FINRA members. The FAQs addressed the following topics.

Who Can Engage in Regulation Crowdfunding Transactions?

Q1. Who can offer or sell securities under Regulation Crowdfunding?

Q2. My firm is a registered broker-dealer and a member of FINRA.  We want to begin making Regulation Crowdfunding offerings available on our platform to our customers.  Do we have to notify FINRA? 

Q3. Is it permissible for an issuer to conduct a Regulation Crowdfunding offering on its own website? What if the issuer’s website says that my firm is the intermediary for the offering?

Testing the Waters

Q4. What are “testing the waters” communications?  Who is allowed to “test the waters” for investor interest in a potential offering under Regulation Crowdfunding? 

Q5. Can an intermediary “test the waters” for investor interest in an offering?  

Public Availability of Information

Q6. After the Form C offering statement is filed with the SEC, is it permissible for an intermediary to make information about a Regulation Crowdfunding offering available only via a private link or private web page that is not publicly accessible to all viewers of the intermediary’s platform? 

Highlighting Offerings

Q7. Is it permissible for a funding portal to highlight specific Regulation Crowdfunding offerings on its platform using terms such as “Hot this week,” “Almost Sold Out,” “Invest Now!,” “Last Chance,” or “Don’t miss this opportunity,” or similar terminology?

You can view the FINRA FAQs here: https://www.finra.org/registration-exams-ce/funding-portals/faq-regulation-crowdfunding