Crowdfunding ice begins to melt reports St. Louis Business Journal

15 Jan

Regulator asks for input from
prospective crowdfunding portals

by 

St. Louis Business Journal (1/14/13) –  A month ago we told you it’s coming, and now it’s here. The Financial Industry Regulatory Authority (FINRA) has released an interim application for prospective funding portals, entities which will serve as middlemen between investors and companies looking for funding under rules proposed in the JOBS Act.

The FINRA interim application is a voluntary request-for-information from companies who plan on registering as funding portals. The organization will use data from the applications in cooperation with the Securities and Exchange Commission, which is responsible for writing the rules.

In the application FINRA asks prospective funding portals to explain their business model and how they plan to protect investors from potential fraud and work with securities dealers and escrow agents to securely process transactions.

FINRA also wants to know if would-be funding portals plan to make money via commissions, referral fees or flat fees and whether they will charge the investor or the company for using their services.

Read more…

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