{"id":6748,"date":"2015-10-14T10:14:05","date_gmt":"2015-10-14T14:14:05","guid":{"rendered":"http:\/\/centerforfinancialstability.org\/wp\/?p=6748"},"modified":"2015-10-14T10:14:05","modified_gmt":"2015-10-14T14:14:05","slug":"finra-proposes-funding-portal-rules-with-related-forms","status":"publish","type":"post","link":"https:\/\/centerforfinancialstability.org\/wp\/2015\/10\/14\/finra-proposes-funding-portal-rules-with-related-forms\/","title":{"rendered":"FINRA Proposes Funding Portal Rules with Related Forms"},"content":{"rendered":"<div class=\"theTitle\"><\/div>\n<div class=\"theText\">\n<p><span class=\"Body\">FINRA proposed the adoption of Funding Portal Rules 100, 110, 200, 300, 800, 900 and 1200 (collectively, the &#8220;Funding Portal Rules&#8221;) and related forms. The new rules were promulgated pursuant to the 2012 JOBS Act which &#8220;prohibits funding portals from a variety of activities, including offering investment advice or recommendations, soliciting transactions for securities displayed on their websites, compensating employees for securities solicitations, and holding investor funds or securities.&#8221; As part of its plan, FINRA also proposed the adoption of new FINRA Rule 4518 (&#8220;Notification to FINRA in Connection with the <a href=\"http:\/\/www.cadwalader.com\/thecabinet\/publications.php?publication_id=197&amp;document_type=Publication\"><u><span style=\"color: #0066cc\">JOBS Act<\/span><\/u><\/a>&#8220;) in the FINRA rulebook.<!-- break --><\/span><\/p>\n<p class=\"Body\">The proposed Funding Portal Rules consist of the following set of seven rules and their related forms:<\/p>\n<ul>\n<li class=\"Body\">Funding Portal Rule 100 (&#8220;General Standards&#8221;);<\/li>\n<li class=\"Body\">Funding Portal Rule 110 and Forms (&#8220;Funding Portal Application&#8221;);<\/li>\n<li class=\"Body\">Funding Portal Rule 200 (&#8220;Conduct&#8221;);<\/li>\n<li class=\"Body\">Funding Portal Rule 300 (&#8220;Compliance&#8221;);<\/li>\n<li class=\"Body\">Funding Portal Rule 800 (&#8220;Investigations and Sanctions&#8221;);<\/li>\n<li class=\"Body\">Funding Portal Rule 900 (&#8220;Code of Procedure&#8221;); and<\/li>\n<li class=\"Body\">Funding Portal Rule 1200 (&#8220;Arbitration and Mediation&#8221;).<\/li>\n<\/ul>\n<p class=\"Body\">FINRA&#8217;s proposed Rule 4518 would apply to registered broker members and also would provide that a member of FINRA should notify it in the manner prescribed by FINRA:<\/p>\n<ul>\n<li class=\"Body\">prior to engaging, for the first time, in a transaction involving the offer or sale of securities in reliance on <a href=\"http:\/\/www.cadwalader.com\/thecabinet\/publications.php?publication_id=71&amp;document_type=Publication#1373\"><u><span style=\"color: #0066cc\">Section 4(a)(6)<\/span><\/u><\/a> (&#8220;Exempted Transactions&#8221;) of the Securities Act; or<\/li>\n<li class=\"Body\">within 30 days of directly or indirectly controlling, or being controlled by or under common control with, a funding portal as defined pursuant to Rule 300(c)(2) of the SEC&#8217;s proposed crowdfunding regulations.<\/li>\n<\/ul>\n<p class=\"Body\">In a related filing, FINRA proposed a rule change to adopt Section 15 of <a href=\"http:\/\/finra.complinet.com\/en\/display\/display_main.html?rbid=2403&amp;element_id=4693\"><u><span style=\"color: #0066cc\">Schedule A<\/span><\/u><\/a> to the FINRA By-Laws, which would govern fees for funding portals.<\/p>\n<blockquote>\n<p class=\"Action_Box\"><span class=\"Subheader\">Lofchie Comment:<\/span> <span class=\"Body\">The new rules are less burdensome than those that were proposed originally.<\/span><\/p>\n<\/blockquote>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>FINRA proposed the adoption of Funding Portal Rules 100, 110, 200, 300, 800, 900 and 1200 (collectively, the &#8220;Funding Portal Rules&#8221;) and related forms. The new rules were promulgated pursuant to the 2012 JOBS Act which &#8220;prohibits funding portals from &hellip; <a href=\"https:\/\/centerforfinancialstability.org\/wp\/2015\/10\/14\/finra-proposes-funding-portal-rules-with-related-forms\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-6748","post","type-post","status-publish","format-standard","hentry","category-reg"],"_links":{"self":[{"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/posts\/6748","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/comments?post=6748"}],"version-history":[{"count":1,"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/posts\/6748\/revisions"}],"predecessor-version":[{"id":6749,"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/posts\/6748\/revisions\/6749"}],"wp:attachment":[{"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/media?parent=6748"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/categories?post=6748"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/centerforfinancialstability.org\/wp\/wp-json\/wp\/v2\/tags?post=6748"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}