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Corrected to Conform to Federal Register Version
SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 200, 227, 232, 239, 240 and 249
[Release Nos. 33-9470; 34-70741; File No. S7-09-13]
RIN 3235-AL37
CROWDFUNDING
AGENCY:
ACTION:
SUMMARY:
DATES:
ADDRESSES:
Electronic Comments
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http://www.sec.gov/rules/proposed.shtml
http://www.regulations.gov
Paper Comments
http://sec.gov/rules/proposed.shtml
FOR FURTHER INFORMATION CONTACT:
http://www.sec.gov/rules/proposed.shtmlhttp://www.sec.gov/rules/proposed.shtmlhttp://www.sec.gov/rules/proposed.shtmlmailto:[email protected]:[email protected]:[email protected]://www.regulations.gov/http://www.regulations.gov/http://www.regulations.gov/http://sec.gov/rules/proposed.shtmlhttp://sec.gov/rules/proposed.shtmlhttp://sec.gov/rules/proposed.shtmlhttp://sec.gov/rules/proposed.shtmlhttp://www.regulations.gov/mailto:[email protected]://www.sec.gov/rules/proposed.shtml8/13/2019 JOBS Act - Crowdfunding
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SUPPLEMENTARY INFORMATION:
Table of Contents
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I. Introduction and Background
A. Overview of Crowdfunding
e.g.
e.g.
See, e.g. Crowdfunding and the Federal Securities Laws
See The Rise of Crowdsourcing
Crowdsourcing as a Model for Problem Solving
See Startups seek the wisdom of crowds, available at
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See
See also
Crowdfunding for a Cause: Nonprofits Can Now Hold Fundraisers on Crowdtilt
available at
See, e.g.
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See Start-Ups Look to the Crowd Proceed At Your Peril: Crowdfunding and the
Securities Act of 1933 Crowdfunding or Fraudfunding?Social Networks and the Securities Laws Why the Specially Tailored Exemption Must be Conditioned on
Meaningful Disclosure The New FederalCrowdfunding Exemption: Promise Unfulfilled
See See
See, e.g. Reves v. Ernst & Young SEC v. W.J. Howey
Co.
See
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B. Title III of the JOBS Act
But see Eliminating the Prohibition Against General Solicitation and General Advertising in Rule 506 and Rule 144A Offerings GeneralSolicitation Adopting Release
o See i.e.
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o
o
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C. Approach to Proposed Rules
See
See
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See See
See
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See Crowd-funding dark side: Sometimesinvestments go down drain
See, e.g. Laws Provide Con Artists with Personal Economic Growth Plan
available at
See also This is What a KickstarterScam Looks Like, available at
/ But see Kickstarter spies a sunglass start-up
Crowdfunding: Invested Central raises $120,000
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II. Discussion of Proposed Regulation Crowdfunding
A. Crowdfunding Exemption
1. Limitation on Capital Raised
See See also
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See
See
See
See
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See
See also
available at
Cf.
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See See also See
See
See
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Request for Comment
See
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2. Investment Limitation
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Net Worth Standard for Accredited Investors
See
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both and
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See See also
See
See
See
See
See
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See
See
See See also
See See
See
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Request for Comment
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e.g.
See
See
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3. Transaction Conducted Through an Intermediary
See
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See
See also
id
See
The Wisdom of Crowds
See
See
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See
See, e.g. Use of Electronic Media by Broker-Dealers, Transfer Agents and Investment Advisers for Delivery of Information, Use of Electronic Media Use of Electronic Media
See
See, e.g.
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Request for Comment
See
See
See
See
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e.g.
See
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4. Exclusion of Certain Issuers from Eligibility under Section 4(a)(6)
o
et seq
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See
See See also
See
See
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See e.g.
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Request for Comment
See
See available at
Id
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e.g.
e.g.
See
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B. Requirements on Issuers
1. Disclosure Requirements
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See
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Request for Comment
a. Offering Statement Disclosure Requirements
i. Information about the Issuer and the Offering
See
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(a) General Information about the Issuer, Officersand Directors
o
o
See Id
See
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of any class
See
See
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Request for Comment
e.g.
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(b) Description of the Business
See See
See
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Request for Comment
See
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(c) Use of Proceeds
See
See
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(d) Target Offering Amount and Deadline
See
See
See See also
See
See
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See
Id.
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Request for Comment
See
See See also
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(e) Offering Price
Request for Comment
(f) Ownership and Capital Structure
See (l) See also
See
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See
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Request for Comment
(g) Additional Disclosure Requirements
See See
See
See
See
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See
See
See
See available at
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See
See
See
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See
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Request for Comment
See
See
See
See
See
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See
See See also
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e.g.
e.g.
ii. Financial Disclosure
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Request for Comment
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(b) Financial Disclosures
See
See
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See
See
See See
See also
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See
See
See
See also
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See
See
See
See
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See
See Smaller Reporting Company Regulatory Relief and Simplification
See also SEC Advisory Committee on Smaller Public Companies, Final Report available at
See
See
See
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See
See
Id.
See
See
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See
See
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See
See
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See
See
See
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See
See
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See
Id.
Id.
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See
See
See
See
See
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Request for Comment
e.g.
Id.
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voluntarily
e.g.
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e.g.
See
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e.g.
See
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Request for Comment
See
See
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See
See Basic Inc. v. Levinson TSC Indus., Inc. v. Northway, Inc.
See
See
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Request for Comment
2. Ongoing Reporting Requirements
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See
See
See
See
See
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See
See See also
See
See
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See
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e.g.
e.g.
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e.g.
e.g.
e.g.
e.g.
See
See
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e.g.
See
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e.g.
3. Form C and Filing Requirements
See
et seq.
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See
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See
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See
See
See
Id.
See
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Request for Comment
See e.g.
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4. Prohibition on Advertising Terms of the Offering
See
See
See
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See
See
See
Id.
See
See
See
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See
See
See
See
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See
See See
See
See
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Id. See also Securities Offering Reform
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Request for Comment
e.g.
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5. Compensation of Persons Promoting the Offering
See
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See
See
See
See
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See See also
o
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Request for Comment
See
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6. Other Issuer Requirements
a. Oversubscriptions
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Request for Comment
See
See
Id. See
See
See
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c. Types of Securities Offered and Valuation
See
See
See
See
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See
See
et seq
See
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Request for Comment
e.g.,
See
See
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C. Requirements on Intermediaries
1. Brokers and Funding Portals
See
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See
See
See
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Request for Comment
2. Requirements and Prohibitions
a. Registration and SRO Membership
o
o
See
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i.e.
See
See
Id.
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See
See also
See
o
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See, e.g. o
o
See
Id.
See
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See
See
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b. Financial Interests
See
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See
See See also
See
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Request for Comment
See See also
See id. See
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See
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de minimis
de minimis
de minimis
3. Measures to Reduce Risk of Fraud
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See
See
See
See
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See
See
See See also
See
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See e.g.
See
See
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l
See
See also id.
See
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more than
See
See
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See
See Compare
See
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See id.
See
e.g.,
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Request for Comment
See
See
See
See also Outsourcing,
available at
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See
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4. Account Opening
a. Accounts and Electronic Delivery
See
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See
See Use of Electronic Media Use of Electronic Media for Delivery Purposes
See
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Request for Comment
See
SeeUse of Electronic Media,
See See also
See also Useof Electronic Media Use of Electronic Media for Delivery Purposes
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b.
Educational Materials
See
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See
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See
See
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See
See also
See
See
See
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See
See
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See
See also
See, e.g.
See also But see
See
See
See
See
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Request for Comment
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c. Promoters
See
See
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Request for Comment
See
See
See also
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d. Compensation Disclosure
Request for Comment
See See also
See Study on Investment Advisers and Broker- Dealers: As Required by Section 913 of the Dodd-Frank Wall Street Reform and Consumer Protection Act
Study on Investment Advisers and Broker-Dealers available at
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5. Requirements with Respect to Transactions
a.
Issuer Information
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See
See
See also
e.g.
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Request for Comment
See
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b. Investor Qualification
i. Compliance with Investment Limitations
See See also
See
See See also
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See
See
See
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Request for Comment
ii. Acknowledgement of Risk
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See
See
See
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See See also
See
See
See See, e.g.
See also
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See
See
See
See
See also
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Request for Comment
See See
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See
See
See See See also
See
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See
See
See
See See also Study on Investment Advisers
and Broker-Dealers
See, e.g.
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See
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Request for Comment
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Request for Comment
e. Maintenance and Transmission of Funds
See
See
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Adoption of Rule 15c2-4 under the Securities Exchange Act of 1934
See
See
i.e.
See
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See FDIC Deposit Insurance Coverage
See
See See also
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See
Compare See also
See
See
See
See
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See
See
See
See
See
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non-bona fide sales
See Requirements of Rules 10b-9 and 15c2-4 under the Securities Exchange Act of 1934 Relating to Issuers, Underwriters and Broker-Dealers Engaged in an All or None Offering
Id.
See
See, e.g.
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Request for Comment
See
See, e.g. Baikie & Alcantara, Inc., See also
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f. Confirmation of Transaction
See See also
Id
See
Id.
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See See
See Confirmation of Transactions
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Request for Comment
See
e.g.
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6. Completion of Offerings, Cancellations and Reconfirmations
et seq.
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See
See i.e.
See
See
See
See
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See See, e.g.
See
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See
See
See
See id.
See
See
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See
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Request for Comment
See
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7. Payments to Third Parties
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See
See id.
See
See id.
See id.
See
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See, e.g. Privacy: Alternatives Exist for Enhancing Protection of Personally Identifiable Information Information Security: Protecting Personally Identifiable Information, See also Guide to Protecting the Confidentiality of
Personally Identifiable Information (PII): Recommendations of the National Institute of Standards andTechnology
See
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Request for Comment
See Persons Deemed Not to Be Brokers,
See also
See also
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D. Additional Requirements on Funding Portals
1. Registration Requirement
a. Generally
Compare o
See See also
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See
See
See
See
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See
See
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See
See
See
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o
See
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Request for Comment
b. Form Funding Portal
See
See
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See
See
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See
See id.
See id.
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Request for Comment
See
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c. Fidelity Bond
See
See
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See
See
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Request for Comment
d. Requirements for Nonresident Funding Portals
See
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See
See
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e.g.
See
See available at See
also available at
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Request for Comment
available at
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2. Exemption from Broker-Dealer Registration
See
See
See also o
8/13/2019 JOBS Act - Crowdfunding
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See generally
See See also
o o
See
See See also
See See also
8/13/2019 JOBS Act - Crowdfunding
223/584
Request for Comment
See See See
also o
8/13/2019 JOBS Act - Crowdfunding
224/584
3. Safe Harbor for Certain Activities
See, e.g.
See, e.g
See
8/13/2019 JOBS Act - Crowdfunding
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e.g.
See id
See
See id See id.
See
See
See id.
8/13/2019 JOBS Act - Crowdfunding
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i.e.
o
o
o
See
See
See
See
See
See
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227/584
See
See
See
See
See
See
See
8/13/2019 JOBS Act - Crowdfunding
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See
See also
See
See See also
See
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Limiting Offerings
See, e.g.
See
8/13/2019 JOBS Act - Crowdfunding
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See
See, e.g.
8/13/2019 JOBS Act - Crowdfunding
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See
See
See
8/13/2019 JOBS Act - Crowdfunding
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Highlighting Issuers and Offerings
e.g.,
See
See
8/13/2019 JOBS Act - Crowdfunding
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Providing Search Functions
See
See
See See also
8/13/2019 JOBS Act - Crowdfunding
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Providing Communication Channels
See
See
See
8/13/2019 JOBS Act - Crowdfunding
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8/13/2019 JOBS Act - Crowdfunding
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Advising Issuers
See See
Compare Registration of Municipal Advisors
8/13/2019 JOBS Act - Crowdfunding
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Paying for Referrals
See, e.g.
See
See See also
8/13/2019 JOBS Act - Crowdfunding
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Compensation Arrangements with Registered Broker-Dealers
See
See
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See also Payments to Unregistered Persons: FINRA Request Comment on Proposed Consolidated FINRA Rule Governing Payments to Unregistered Persons available at
o
See, e.g.,
See
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8/13/2019 JOBS Act - Crowdfunding
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Denying Access Based on Potential Fraud or Investor
Protection Concerns
Accepting Investor Commitments
See
See See also
See
See
8/13/2019 JOBS Act - Crowdfunding
242/584
8/13/2019 JOBS Act - Crowdfunding
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Request for Comment
8/13/2019 JOBS Act - Crowdfunding
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245/584
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Request for Comment
e.g.
b. Anti-Money Laundering
See See also
See
See et seq.
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8/13/2019 JOBS Act - Crowdfunding
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See Money Laundering and Terrorist Financing in theSecurities Sector
Id.
Id
Id
Id
Id
See, e.g. Guidance on Obtaining and Retaining Beneficial Ownership Information
The Role of Domestic Shell Companies in
Financial Crime and Money Laundering: Limited Liability Companies available at
8/13/2019 JOBS Act - Crowdfunding
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8/13/2019 JOBS Act - Crowdfunding
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et seq o
See
8/13/2019 JOBS Act - Crowdfunding
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See
See, e.g.
See
8/13/2019 JOBS Act - Crowdfunding
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See
8/13/2019 JOBS Act - Crowdfunding
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Request for Comment
8/13/2019 JOBS Act - Crowdfunding
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c. Privacy
See
See
See
8/13/2019 JOBS Act - Crowdfunding
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i.e.
i.e.
See Privacy of Consumer Financial Information (Regulation SP)
See Regulation SAM: Limitations on Affiliate Marketing
See Identity Theft Red Flags Rules Identity Theft Red Flags Rules
See
See
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See Identity Theft Red Flags Rules See
See See
See
See
See
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259/584
Request for Comment
See
See
See
8/13/2019 JOBS Act - Crowdfunding
260/584
8/13/2019 JOBS Act - Crowdfunding
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5. Records To Be Created and Maintained by Funding Portals
See
See Recordkeeping by Brokers and Dealers
See
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See id
See
See
See
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See
See
See
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See
See See also
See
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See
8/13/2019 JOBS Act - Crowdfunding
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See
See
See See See also
8/13/2019 JOBS Act - Crowdfunding
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Request for Comment
See generally
See
8/13/2019 JOBS Act - Crowdfunding
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E. Miscellaneous Provisions
1. Insignificant Deviations from Regulation Crowdfunding
See
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8/13/2019 JOBS Act - Crowdfunding
270/584
Request for Comment
See
See
See also
8/13/2019 JOBS Act - Crowdfunding
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e.g.
2. Restrictions on Resales
See
See also
8/13/2019 JOBS Act - Crowdfunding
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Request for Comment
See
See also Family Offices Family Offices
8/13/2019 JOBS Act - Crowdfunding
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See
See
8/13/2019 JOBS Act - Crowdfunding
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3. Information Available to States
Request for Comment
See
See
See
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275/584
8/13/2019 JOBS Act - Crowdfunding
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See
See
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See
Id.
See
See
See
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Request for Comment
See id.
See
But see
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e.g.
See
See id.
8/13/2019 JOBS Act - Crowdfunding
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5. Scope of Statutory Liability
See
See
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281/584
6. Disqualification
8/13/2019 JOBS Act - Crowdfunding
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o
8/13/2019 JOBS Act - Crowdfunding
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o
o
o
See See also Disqualification Adopting Release
See
8/13/2019 JOBS Act - Crowdfunding
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a. Issuers and Certain Other Associated Persons
See
See
See
See
See Disqualification Adopting Release
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i. Covered Persons
See
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See
See
See See also
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ii. Disqualifying Events
(a) Criminal Convictions
8/13/2019 JOBS Act - Crowdfunding
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See
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(b) Court Injunctions and Restraining Orders
See Disqualification of Felons and Other Bad Actors from Rule 506 Offerings
See also Disqualification Adopting Release
See
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See
See
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(c) Final Orders of Certain Regulators
8/13/2019 JOBS Act - Crowdfunding
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See
Disqualification Adopting Release
See, e.g. o
8/13/2019 JOBS Act - Crowdfunding
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i.e.
et seq
See
See
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Steadman v. SEC affd on other grounds
8/13/2019 JOBS Act - Crowdfunding
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(d) Commission Disciplinary Orders
See In the Matter of Mitchell M. Maynard and Dorice A. Maynard
See
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(e) Certain Commission Cease-and-Desist Orders
8/13/2019 JOBS Act - Crowdfunding
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See
o
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(f) Suspension or Expulsion from SRO Membershipor Association with an SRO Member
e.g.
See SEC v. Ross Swenson v. Engelstad SEC v. N. Am. Research and Dev. Corp. SEC v. Pearson
See
o
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(g) Stop Orders and Orders Suspending theRegulation A Exemption
(h) United States Postal Service FalseRepresentation Orders
See
See
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Request for Comment
See
8/13/2019 JOBS Act - Crowdfunding
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e.g.
iii. Reasonable Care Exception
See
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See also
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iv. Waivers
See
8/13/2019 JOBS Act - Crowdfunding
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See
See available at Blue Sky Practice for
Public and Private Direct Participation Offerings
8/13/2019 JOBS Act - Crowdfunding
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Request for Comment
e.g.
v. Transition Issues
See
8/13/2019 JOBS Act - Crowdfunding
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Request for Comment
See
See
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311/584
b. Intermediaries and Certain Other Associated Persons
8/13/2019 JOBS Act - Crowdfunding
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Request for Comment
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A. Economic Baseline
1. Existing Funding Sources Available to Startups and Small Businesses
e.g.
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See Capital Raising in the U.S.: An Analysis ofUnregistered Offerings Using the Regulation D Exemption, 2009-2012 Ivanov/BauguessStudy available at
See, e.g. The Seven Percent Solution
The Determinants of Underpricing for Seasoned Equity Offers Investment Bank Reputation and the Price and Quality of Underwriting Services
Convertibles and Hedge Funds as Distributors of Equity Exposure
8/13/2019 JOBS Act - Crowdfunding
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See also Factors That May Affect
Trends in Regulation A Offerings available at
See General Solicitation Adopting Release
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!"#$ &'(''$)*+, -&../) 0*1*2
3/++$) &'(''$)*+,
4556$) /+74+8$52&)
9$:6*)$1$+25;*.*+,
9$:6*)$1$+29$52)*?"@A$1#2*&+
>$
8/13/2019 JOBS Act - Crowdfunding
323/584
$%%4
8/13/2019 JOBS Act - Crowdfunding
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+45%-*(.($1
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b. Commercial Loans, Peer-to-Peer Loans and Microfinance
See
The Economics of Small Business Finance: The Roles of Private Equity and Debt Markets in the Financial Growth Cycle See also
available at
See How Do Start-Up Firms Finance Their Assets? Evidence from the
Kauffman Firm Surveys available at See
See 2013 State of Entrepreneurship Address available at
8/13/2019 JOBS Act - Crowdfunding
326/584
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e.g.
See What Do We Know About the Capital Structure of Privately Held Firms? Evidence fromthe Surveys of Small Business Finance available at
See Id.
available at
et seq
et seq
et seq See Microloan Program, available at
See FY 2013 Congressional Budget Justification And FY 2011 Annual Performance Report 2011 Annual Performance Report available at
8/13/2019 JOBS Act - Crowdfunding
328/584
See Putting the S.B.A. Into Perspective available at
See
See
See Peer-to-Peer Lending and Community Development Finance available at
Id.
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Id.
Id.
See Making Microfinance Work: Managing for Improved Performance
See Microfinance Handbook: An Institutional and Financial Perspective
See State of Microcredit Summit Campaign Report 2009
8/13/2019 JOBS Act - Crowdfunding
330/584
c. Venture Capitalists and Angel Investors
See Key Data on the Scale of Microlending in the U.S.
Id.
See Recent Stats & Studies available at
8/13/2019 JOBS Act - Crowdfunding
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e.g.
e.g.
See
See Financial Contracting Meets the Real World: An Empirical Analysis of Venture Capital Contracts
8/13/2019 JOBS Act - Crowdfunding
332/584
d. Current Crowdfunding Practices
See The Importance of Angel Investing in Financing the Growth of Entrepreneurial Ventures
See
See Crowdfunding Industry Report: Market Trends, Composition and Crowdfunding Platforms available at
Id.
Id.
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See Annals of Dubious
Statistics, Crowdfunding Edition available at
See Widely Cited Crowdfunding Market Estimates Are Probably Too Optimistic available at
See .
Id.
Id.
Id.
See General Solicitation Adopting Release
8/13/2019 JOBS Act - Crowdfunding
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3. Survival Rates for Startups and Small Businesses
See AnOverview of the Kauffman Firm Survey: Results from the 2004-2008 Data
available at
See New Lists: Fundamentals and Survival Rates
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4. Market Participants
See Whom You Know Matters: Venture Capital Networks and Investment Performance
See The Venture Capital Secret: 3 Out of 4 Start-Ups Fail
See Firm and Product Life Cycles and Firm Survival
See Business Dynamics Statistics, Data: Firm Characteristics available at .
8/13/2019 JOBS Act - Crowdfunding
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a. Issuers
See
See Recent Stats & Studies available at
8/13/2019 JOBS Act - Crowdfunding
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See 2011 Annual Performance Report
See
See
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e.g.
See, e.g.
FY 2014 Congressional Budget Justification, 2014 Annual Performance Plan, FY 2012
Annual Performance Report available at
8/13/2019 JOBS Act - Crowdfunding
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b. Crowdfunding Intermediaries
See The Dynamics of Crowdfunding: An Exploratory Study available at
8/13/2019 JOBS Act - Crowdfunding
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See
Id.
Id. .
See id.
see Meetings with SECOfficials available at
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c. Investors
Id. See Crowdfunding platform ships product samples to potential investors
See Rich Mans Crowd Funding See also Quickly adapting to crowdfunding laws In the Crowdfunding Gold
Rush, This Company Has a Rare Edge
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d.
Other Capital Providers, Broker-Dealers and Finders inPrivate Offerings
See Crowdfunding Why Angels,
Venture Capitalists And Private Equity Investors All May Benefit
8/13/2019 JOBS Act - Crowdfunding
343/584
See Report and Recommendations of the Task Force on Private Placement Broker-Dealers,
See Ivanov/Bauguess Study
8/13/2019 JOBS Act - Crowdfunding
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e.g.
B. Analysis of Proposed Rules
See, e.g.
8/13/2019 JOBS Act - Crowdfunding
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1. Broad Economic Considerations
8/13/2019 JOBS Act - Crowdfunding
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e.g.
See
See, e.g. Corporate Investment and Stock Market Listing: A Puzzle? available at
8/13/2019 JOBS Act - Crowdfunding
347/584
8/13/2019 JOBS Act - Crowdfunding
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See
See
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See Market Microstructure of the Pink Sheets
Asset Pricing in the Dark: The Cross Section of OTC Stocks
See Down and Out in the Stock Market: The Law and Finance
of the Delisting Process See
Off But Not Gone: A Study of NASDAQ Delistings
available at
8/13/2019 JOBS Act - Crowdfunding
350/584
e.g.
See
8/13/2019 JOBS Act - Crowdfunding
351/584
e.g.
8/13/2019 JOBS Act - Crowdfunding
352/584
e.g.
See, e.g. Deutsche Bank Microcredit Development Fund, Inc.
8/13/2019 JOBS Act - Crowdfunding
353/584
2. Crowdfunding Exemption
a. Limitation on Capital Raised
See also
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354/584
b. Investment Limitations
See See also
8/13/2019 JOBS Act - Crowdfunding
355/584
c. Issuer Eligibility
See
See The Risk and Return of Venture Capital
See
8/13/2019 JOBS Act - Crowdfunding
356/584
See See also
See
See
8/13/2019 JOBS Act - Crowdfunding
357/584
3. Issuer Requirements
8/13/2019 JOBS Act - Crowdfunding
358/584
See
See
See See also
See See also
8/13/2019 JOBS Act - Crowdfunding
359/584
8/13/2019 JOBS Act - Crowdfunding
360/584
See See also
See
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See Economic Consequences of Financial Reporting and Disclosure Regulation: A Review and Suggestions for Future Research
available at
8/13/2019 JOBS Act - Crowdfunding
362/584
See See also
See
See
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b. Financial Condition and Financial Statement Disclosure
Requirements
See General Solicitation Adopting Release
See See also
8/13/2019 JOBS Act - Crowdfunding
364/584
8/13/2019 JOBS Act - Crowdfunding
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See
See
See
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366/584
See
But see
See See also
See
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367/584
Id
See
See
See
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368/584
8/13/2019 JOBS Act - Crowdfunding
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See
See
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c. Issuer Filing Requirements
See
See
See See also
See See also
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371/584
See See also
8/13/2019 JOBS Act - Crowdfunding
372/584
8/13/2019 JOBS Act - Crowdfunding
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See
See See also
See See also
8/13/2019 JOBS Act - Crowdfunding
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d. Advertising Notice of Offering
See
See See
See
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375/584
e. Compensation of Persons Promoting the Offering
See See also
See
See See also
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376/584
f. Oversubscription and Offering Price
See See also
See
See See also
8/13/2019 JOBS Act - Crowdfunding
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e.g.
h. Restrictions on Resales
e.g.
See l
See
See See also
8/13/2019 JOBS Act - Crowdfunding
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4.
Intermediary Requirements
See .
8/13/2019 JOBS Act - Crowdfunding
379/584
See
8/13/2019 JOBS Act - Crowdfunding
380/584
See
See available at
Crowdfunding Portals availableat
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8/13/2019 JOBS Act - Crowdfunding
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e.g.
8/13/2019 JOBS Act - Crowdfunding
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See
See
See
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8/13/2019 JOBS Act - Crowdfunding
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Estimated Costs of Intermediaries That Register As Brokers
Estimated CostsInitial Cost (Year 1) Ongoing Cost per Year
Subtotal $770,000 $270,000
Estimated Costs of Intermediaries That Register As Funding Portals
Estimated CostsInitial Cost (Year 1) Ongoing Cost per Year
Subtotal $417,000 $90,000
See
See
See
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Estimated Incremental Costs of Intermediaries Already Registered as Brokers
Estimated CostsInitial Cost (Year 1) Ongoing Cost per Year
Subtotal $295,000 $70,000
See
See
8/13/2019 JOBS Act - Crowdfunding
387/584
See
See Jumpstart Our Business Startups Act: FINRA Requests Comment on Proposed Regulation of
Crowdfunding Activities available at
See
8/13/2019 JOBS Act - Crowdfunding
388/584
a. Disclosure and Dissemination Requirements
See
See
8/13/2019 JOBS Act - Crowdfunding
389/584
8/13/2019 JOBS Act - Crowdfunding
390/584
See Policy Issues Raised by Structured Products available at
See
8/13/2019 JOBS Act - Crowdfunding
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See
8/13/2019 JOBS Act - Crowdfunding
392/584
i.e.,
See
See
8/13/2019 JOBS Act - Crowdfunding
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See
8/13/2019 JOBS Act - Crowdfunding
394/584
See
See
See
8/13/2019 JOBS Act - Crowdfunding
395/584
b. Measures to Reduce the Risk of Fraud and Limitations
8/13/2019 JOBS Act - Crowdfunding
396/584
See
8/13/2019 JOBS Act - Crowdfunding
397/584
See
See
8/13/2019 JOBS Act - Crowdfunding
398/584
8/13/2019 JOBS Act - Crowdfunding
399/584
See
8/13/2019 JOBS Act - Crowdfunding
400/584
See
See
8/13/2019 JOBS Act - Crowdfunding
401/584
See
See
8/13/2019 JOBS Act - Crowdfunding
402/584
5. Additional Funding Portal Requirements
See
8/13/2019 JOBS Act - Crowdfunding
403/584
i.e.
8/13/2019 JOBS Act - Crowdfunding
404/584
See See also
8/13/2019 JOBS Act - Crowdfunding
405/584
e.g.
a. Safe Harbor for Certain Activities
See
8/13/2019 JOBS Act - Crowdfunding
406/584
e.g.
See
See
8/13/2019 JOBS Act - Crowdfunding
407/584
See
See
See
8/13/2019 JOBS Act - Crowdfunding
408/584
See
See
See
8/13/2019 JOBS Act - Crowdfunding
409/584
b. Compliance Requirements
See
See
See
8/13/2019 JOBS Act - Crowdfunding
410/584
See
See See also
See
See
8/13/2019 JOBS Act - Crowdfunding
411/584
See
8/13/2019 JOBS Act - Crowdfunding
412/584
See
See
8/13/2019 JOBS Act - Crowdfunding
413/584
6. Insignificant Deviations
See
8/13/2019 JOBS Act - Crowdfunding
414/584
7.
Relationship with State Law
8/13/2019 JOBS Act - Crowdfunding
415/584
8/13/2019 JOBS Act - Crowdfunding
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8/13/2019 JOBS Act - Crowdfunding
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9. Disqualification
a. Issuers
See See also
See Disqualification Adopting Release
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418/584
See See also
8/13/2019 JOBS Act - Crowdfunding
419/584
See See also
8/13/2019 JOBS Act - Crowdfunding
420/584
e.g.
See Disqualification Adopting Release
8/13/2019 JOBS Act - Crowdfunding
421/584
b. Intermediaries
See
8/13/2019 JOBS Act - Crowdfunding
422/584
C. Request for Comment
8/13/2019 JOBS Act - Crowdfunding
423/584
8/13/2019 JOBS Act - Crowdfunding
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e.g.
i.e.
8/13/2019 JOBS Act - Crowdfunding
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8/13/2019 JOBS Act - Crowdfunding
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o e.g.
o
o
o
8/13/2019 JOBS Act - Crowdfunding
427/584
IV. Paperwork Reduction Act
A. Background
et seq.
8/13/2019 JOBS Act - Crowdfunding
428/584
B. Estimate of Issuers and Intermediaries
1. Issuers
2. Intermediaries that are Registered Brokers
See
See id.
8/13/2019 JOBS Act - Crowdfunding
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3. Funding Portals
See, e.g.
See
Id.
Id
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C. Estimate of Burdens
1. Issuers
a. Form C: Offering Statement and Progress Update
e.g.
See
See
See
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See
See
See
See
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See
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433/584
b. Form C-AR: Annual Report
See
See
See
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c. Form C-TR: Termination of Reporting
d. Form ID Filings
See
See
See
8/13/2019 JOBS Act - Crowdfunding
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2. Brokers and Funding Portals
a.
Registration Requirements
i. Time Burden
See
See
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8/13/2019 JOBS Act - Crowdfunding
437/584
8/13/2019 JOBS Act - Crowdfunding
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8/13/2019 JOBS Act - Crowdfunding
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i.e.
ii. Cost
See Revised Fees: Changes to Advertising, Corporate Financing, New Membership andContinuing Membership Application, Central Registration Depository and Branch Office Annual
Registration Fees available at
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b. Development of Intermediary Platform
i. Time Burden
See
8/13/2019 JOBS Act - Crowdfunding
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ii. Cost
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c. Measures to Reduce the Risk of Fraud
i. Time Burden
See
8/13/2019 JOBS Act - Crowdfunding
444/584
ii. Cost
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e.g.
See, e.g. Background Check FAQ: Frequently Asked Questions available at
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d. Account Opening: Accounts and Electronic Delivery
i. Time Burden
See
8/13/2019 JOBS Act - Crowdfunding
447/584
ii. Cost
e. Account Opening: Educational Materials
i. Time Burden
See
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448/584
ii. Cost
See, e.g. What Is the Cost of Video Production for the Web? available at
8/13/2019 JOBS Act - Crowdfunding
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f. Account Opening: Promoters
i. Time Burden
See
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ii. Cost
g. Issuer Disclosures to be Made Available
i.
Time Burden
See
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451/584
ii. Cost
h. Other Disclosures to Investors and Potential Investors
i. Time Burden
8/13/2019 JOBS Act - Crowdfunding
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ii. Cost
See
See
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i. Maintenance and Transmission of Funds
i. Time Burden
See
8/13/2019 JOBS Act - Crowdfunding
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ii. Cost
j. Fidelity Bond
i.
Time Burden
See
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ii. Cost
k. Compliance: Policies and Procedures
i. Time Burden
ii. Cost
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l. Compliance: Anti-Money Laundering
m. Compliance: Privacy
i. Time Burden
See
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8/13/2019 JOBS Act - Crowdfunding
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8/13/2019 JOBS Act - Crowdfunding
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ii. Cost
n. Records to be Made and Kept by Funding Portals
i. Time Burden
See
available at
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ii. Cost
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D. Collections of Information are Mandatory
8/13/2019 JOBS Act - Crowdfunding
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E. Confidentiality
F. Retention Period of Recordkeeping Requirements
G. Request for Comment
et seq
See
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V. Small Business Regulatory Enforcement Fairness Act
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VI. Initial Regulatory Flexibility Act Analysis
A. Reasons for the Proposed Actions
8/13/2019 JOBS Act - Crowdfunding
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B. Objectives
C. Small Entities Subject to the Proposed Rules
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D. Projected Reporting, Recordkeeping and other Compliance Requirements
See
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8/13/2019 JOBS Act - Crowdfunding
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E. Duplicative, Overlapping or Conflicting Federal Rules
F Significant Alternatives
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1. Issuers
2. Intermediaries
See
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G. Request for Comment
VII. STATUTORY AUTHORITY AND TEXT OF PROPOSED REGULATION
et
seq.
et seq.
List of Subjects
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PART 200 ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION ANDREQUESTS
Subpart A Organization and Program Management
l
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200.30-1 Delegation of authority to Director of Division of Corporation Finance.
et seq
PART 227REGULATION CROWDFUNDING, GENERAL RULES ANDREGULATIONS
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Authority
SUBPART A General
227.100 Crowdfunding exemption and requirements.
Exemption
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Instruction 1 to paragraph (a)(2)
Instruction 2 to paragraph (a)(2).
Instruction 3 to paragraph (a)(2).
8/13/2019 JOBS Act - Crowdfunding
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et seq
Instruction 1 to paragraph (a)(3)
Instruction 2 to paragraph (a)(3)
Applicability
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Issuer issuer
Instruction to paragraph (c)
Platform platform
SUBPART B Requirements for Issuers
227.201 Disclosure requirements.
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Instruction to paragraph (b) officer
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Instruction to paragraph (i)
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Instruction to paragraph (q)
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Instruction to paragraph (r)
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Instruction to paragraph (s)
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Instruction 1 to paragraph (t)
Instruction 2 to paragraph (t)
Instruction 3 to paragraph (t)
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Instruction 4 to paragraph (t)
Instruction 5 to paragraph (t)
Instruction 6 to paragraph (t)
Instruction 7 to paragraph (t)
Instruction 8 to paragraph (t)
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Instruction 9 to paragraph (t)
Instruction 10 to paragraph (t)
Instruction to paragraph (u)
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227.202 Ongoing reporting requirements.
227.203 Filing requirements and form.
Offering Statement.
8/13/2019 JOBS Act - Crowdfunding
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Instruction to paragraph (a)(1)
Amendments to Offering Statement.
8/13/2019 JOBS Act - Crowdfunding
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Instruction to paragraph (a)(2).
Progress Updates.
Instruction 1 to paragraph (a)(3)
Instruction 2 to paragraph (a)(3)
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Instruction 1 to paragraph (a)
Instruction 2 to paragraph (a)
Form C: Annual Report
Instruction to paragraph (b)(1)
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227.204 Advertising.
Instruction to 227.204. terms of the offering
227.205 Promoter compensation.
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SUBPART C Requirements for Intermediaries
227.300 Intermediaries.
Requirements
o
o
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Prohibitions
financial interest in an
issuer
Definitions
Associated person of a funding portal person associated with a funding portal
o
Funding portal
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Intermediary
o
Investor
Self-regulatory organization SRO
227.301 Measures to reduce risk of fraud.
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227.302 Account opening.
Accounts and Electronic Delivery
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Educational Materials
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Promoters
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Compensation Disclosure
227.303 Requirements with respect to transactions.
Issuer Information
Investor Qualification
8/13/2019 JOBS Act - Crowdfunding
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et seq
Communication Channels
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Notice of Investment Commitment
Maintenance and Transmission of Funds
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provided that
8/13/2019 JOBS Act - Crowdfunding
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Confirmation of Transaction
227.304 Completion of offerings, cancellations and reconfirmations.
Generally
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Early Completion of Offering
provided that:
Cancellations and Reconfirmations Based on Material Changes
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Return of Funds If Offering Is Not Completed
227.305 Payments to third parties. Prohibition on Payments for Personally Identifiable Information
Certain permitted payments
provided that
8/13/2019 JOBS Act - Crowdfunding
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SUBPART D Funding Portal Regulation
227.400 Registration of funding portals.
Registration
o
o
Amendments to Registration
Successor Registration
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provided however
Withdrawal
Applications and Reports
Fidelity Bond
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o
o
Nonresident Funding Portals
Definition nonresident funding portal
Power of Attorney
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Access to Books and Records
Certification and Opinion of Counsel
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Amendments
227.401 Exemption.
o
227.402 Conditional safe harbor.
General
8/13/2019 JOBS Act - Crowdfunding
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Permitted Activities
provided
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provided
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227.403 Compliance.
Policies and Procedures
Anti-Money Laundering
Privacy
Inspections and Examinations
227.404 Records to be made and kept by funding portals.
Generally
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Organizational Documents
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Format
Third Parties
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Review of Records
Financial Recordkeeping and Reporting of Currency and Foreign Transactions
et seq.
SUBPART E Miscellaneous Provisions
227.501 Restrictions on resales.
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accredited investor
member of the family of the purchaser or the
equivalent
Instruction to paragraph (c) spousal
equivalent
227.502 Insignificant deviations from a term, condition or requirement of RegulationCrowdfunding.
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227.503 Disqualification
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Instruction to paragraph (a)(3) Final order
8/13/2019 JOBS Act - Crowdfunding
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o o
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et seq
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523/584
Instruction to paragraph (b)(4)
Instruction to paragraph (d)
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PART 232 REGULATION S-T GENERAL RULES AND REGULATIONS FORELECTRONIC FILINGS
232.101 Mandated electronic submissions and exceptions.
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PART 239 FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933
239.900 Form C.
et seq.
Note: The text of Form C will not appear in the Code of Federal Regulations.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM C
UNDER THE SECURITIES ACT OF 1933
[ ] Form C: Offering Statement[ ] Form C-U: Progress Update: _______________________________________________[ ] Form C-A: Amendment
[ ] Check box if Amendment is material and investors will have five business days toreconfirm
[ ] Form C-AR: Annual Report[ ] Form C-TR: Termination of Reporting
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GENERAL INSTRUCTIONS
I. Eligibility Requirements for Use of Form C
II. Preparation and Filing of Form C
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et seq.
III. Information to be Included in the Form
Item 1. Offering Statement Disclosure Requirements
Item 2. Legends
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Item 3. Annual Report Disclosure Requirements
SIGNATURE
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Instructions.
PART 240 - GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACTOF 1934
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240.12g-6 Exemption for securities issued pursuant to Section 4(a)(6) of the SecuritiesAct of 1933.
l held
of record
PART 249 FORMS, SECURITIES EXCHANGE ACT OF 1934
249.1500 Form Funding Portal
et seq.
Note: The text of Form Funding Portal will not appear in the Code of Federal Regulations.
UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM FUNDING PORTAL
UNDER THE SECURITIES EXCHANGE ACT OF 1934
WARNING:
funding portal SEC funding portals
funding portals SEC
Item 1 Identifying Information
funding portal
funding portal business name
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applicant funding portal
applicant
foreign financial regulatory authority applicant
foreign financial regulatory authority applicant
Foreign Financial Regulatory Authority
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533/584
Item 2 Form of Organization
applicant
applicant i.e. applicant
Item 3 Successions
applicant
funding portal applicant funding portal
Funding Portal
Funding Portal SEC
succession successor
Item 4 Control Persons
person controls applicant controls applicant applicant controls
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.
Item 5 Disclosure Information
applicant applicant
applicant
applicant
A. Criminal Action Disclosure
applicant associated person
felony charge felony
charged felony
applicant associated person
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The response to the following question may be limited to charges that arecurrently pending:
B. Regulatory Action Disclosure
SEC
found applicant associated person
found applicant associated person involved SEC CFTC
found applicant associated person
investment related
order applicant associated person investment-related
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applicant associated person ordered applicant associated person
foreign financial regulatory authority
found applicant associated person
found applicant associated person involved investment-related
found applicant associated person
investment-related
order applicant associated person investment-related
applicant applicant applicant
applicant associated person
applicant associated person
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applicant associated person involved
SEC
applicant associated person investment-related
applicant associa
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