Recent Developments in Funding Portal Regulations

FINRA Requests Comment on Rules Impacting Capital Formation  (Regulatory Notice 17-14)

FINRA is requesting comment and industry input on rules impacting capital formation, including those rules related to Regulation Crowdfunding and FINRA’s Funding Portal rules.  FINRA is interested in industry perspectives in several areas, including whether FINRA’s rules are effective and responsive to the problems that the rules were intended to address.  This is an opportunity for the funding portal industry to comment on FINRA’s approach to the implementation and enforcement of funding portal rules and regulations.

SEC Adopts JOBS Act Amendments to Help Entrepreneurs and Investors (SEC Press Release 2017-78)

Sections 4(a)(6) and 4A of the Securities Act set forth dollar amounts used in connection with the crowdfunding exemption, and Section 4A(h)(1) states that such dollar amounts shall be adjusted by the SEC not less frequently than once every five years to reflect the change in the CPI-U published by the BLS (Bureau of Labor Statistics).  The SEC has adopted amendments to Rules 100 and 201(t) of Regulation Crowdfunding and Securities Act Form C to reflect the required inflation adjustments. The Commission approved the new thresholds which became effective when they were published in the Federal Register on April 12, 2017.  Please see the linked Press Release and Federal Register rule release for additional information.