NSBA Provides Crowdfunding Comments to FINRASeptember 5, 2012
The NSBA-supported JOBS Act passed earlier in the year creates an exception to the onerous public company registration requirements for offerings up to $1 million made through a regulated crowdfunding web portal. The Financial Industry Regulatory Authority (FINRA) is likely to become the regulating authority. In July, FINRA put out a notice seeking general comments from the public about how it should regulate crowdfunding portals.
On Aug. 30, NSBA provided comments to FINRA about crowdfunding. In those comments, NSBA urged that FINRA not regulate portals as if they were broker-dealers because to impose such high costs on funding portals would make it uneconomic to become a crowdfunding portal. FINRA, for example, sought comments on whether money laundering regulations should apply to portals. Since portals are prohibited by law from holding customer funds, it is inappropriate to apply these burdensome rules to funding portals.
To read NSBA’s comments to FINRA about crowdfunding, click here.