Crowdfunding

Regulation of Crowdfunding in the United States

Financial Regulation of Crowdfunding Intermediates in the United States

In relation to the crowdfunding intermediary provisions in Title III of the JOBS Act:

Crowdfunding issuers. Title III of the U.S. JOBS Act amends Section 4 of the Securities Act to create a new exemption for offerings of “crowdfunded” securities. Specifically, the JOBS Act amends Section 4 of the Securities Act to exempt issuers from the requirements of Section 5 of that Act when they offer and sell up to $1 million in securities, provided that individual investments do not exceed certain thresholds and the issuer satisfies other conditions in the JOBS Act, some of which will require rulemaking by the SEC. (1)

Funding portals. Title III of the JOBS Act adds new Section 3(h) to the Exchange Act which requires the SEC to exempt, conditionally or unconditionally, an intermediary operating a funding portal from the requirement to register with the SEC as a broker. The intermediary, though, would need to register with the SEC as a funding portal and would be subject to the SEC’s examination, enforcement, and rulemaking authority. The funding portal also must become a member of a national securities association that is registered under Section 15A of the Exchange Act.

The JOBS Act directs the SEC to adopt rules to implement Title III within 270 days of enactment of the Act. The U.S. President signed the JOBS Act into law on April 5, 2012.

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See Also

1. One of these conditions is that issuers use the services of an intermediary that is either a broker registered with the SEC or a “funding portal” registered with the SEC.
2. A funding portal is defined as a crowdfunding intermediary that does not: (i) offer investment advice or recommendations; (ii) solicit purchases, sales, or offers to buy securities offered or displayed on its website or portal; (iii) compensate employees, agents, or others persons for such solicitation or based on the sale of securities displayed or referenced on its website or portal; (iv) hold, manage, possess, or otherwise handle investor funds or securities; or (v) engage in such other activities as the SEC, by rule, determines appropriate.

See Also

• Growth Company
• Brokerage
• Solicitation
• Back-To-Back Letter Of Credit
• Interbank Market
• Bond Investing

Hierarchical Display of Crowdfunding

Finance > Financing and investment > Financing

Crowdfunding

Concept of Crowdfunding

See the dictionary definition of Crowdfunding.

Characteristics of Crowdfunding

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Resources

Translation of Crowdfunding

• Spanish: Micromecenazgo
• French: Financement participatif
• German: Crowdfunding
• Italian: Crowfunding
• Portuguese: Financiamento colaborativo
• Polish: Finansowanie społecznościowe

Thesaurus of Crowdfunding

Finance > Financing and investment > Financing > Crowdfunding

See also

• Collaborative economy

• Crowd financing
• Participatory financing