[ by Howard Haykin ]

FINRA issued a news release informing member firms that both FINRA and the SEC are engaging in an open dialogue about rules that will govern crowdfunding and the anticipated manner by which portals will be used.  On Thursday, made available a temporary form that industry participants can use to provide information to FINRA on how prospective Crowdfunding Portals will operate.  FINRA hopes this information will clarify issues that need to be addressed in any market rules drafted by regulators.

Concurrent with the News Release, FINRA notified the SEC in a Rule Filing that it had adopted the Interim Form for Funding Portals (“IFFP”)  with immediate effectiveness.  The IFFPs are online forms that prospective crowdfunding intermediaries can use to respond to information requests, provide comments and request answers to questions.  

A crowdfunding intermediary would serve on the funding portals during crowdfunding engagements - all pursuant to provisions of the JOBS Act.

FINRA notes that the forms are geared for firms and entities that contemplate serving as prospective crowdfunding portals, and that participation in this dialog with regulators is strictly voluntary. 

Information Requested on the Interim Form.  The Form asks prospective funding portals to provide information including:

• ownership; 
• funding;
• management; and,
• business model and relationships.

FINRA is further requesting the following of prospective funding portals supplement the information in the interim form with any additional information or documents that they believe would be helpful.  All submitted information will be treated in a confidential manner

Thomas Selman, FINRA EVP for Regulatory Policy, offered these comments:  "FINRA is committed to ensuring that the capital-raising objectives of the JOBS Act are advanced in a manner consistent with Congressional intent and investor protection. Crowdfunding portals that file this form will provide FINRA with important information regarding portal business models, which will inform our rulemaking."

Last year, FINRA solicited comments on the specific rules it should adopt for registered funding portals that become FINRA members. FINRA has also asked for comment on the application of existing rules to broker-dealers engaging in crowdfunding activities.

For further details, go to:   [ FINRA News Release, 1/10/13 ]   [ FINRA Rule Filing 13-6, 1/10/13 ].