Some were worried that FINRA might require funding portal representatives to be licensed and to take an exam like the Series 7. But FINRA did a good job of keeping the rules for funding portals as simple as possible.
Tampa, FL (PRWEB) November 07, 2013
While the long-awaited SEC rules related to equity crowdfunding and the JOBS Act were released on October 23 and were greeted with much fanfare, crowdfunding expert Kendall Almerico notes that the equally-important FINRA rules were also released the same day. JOBS Act expert Almerico says the FINRA rules contain some very important provisions that will affect equity crowdfunding when it becomes legal next year.
"FINRA's rules will govern the funding portals, or as the public will call them, the crowdfunding websites," Almerico says. "The term 'funding portal' was created by Congress under the JOBS Act to allow the general public to crowd fund. Almerico notes that, under the JOBS Act, a company wishing to use the crowdfunding exemption to sell securities to the general public must sell through a registered broker-dealer or a funding portals that is registered as a "crowdfunding intermediary"
"One of the interesting things about the JOBS Act is its requirement that funding portals join a national securities association," Almerico says. "FINRA is the only national securities association so every funding portal will have to apply for membership and follow these new FINRA rules once they become official.
Like the SEC crowdfunding rules, the FINRA rules are only proposed rules at this time, and after a public comment period that ends in February, 2014, will become the law. "Only at that time can a funding portal submit its application to FINRA, and then it will likely be 60 days before they are approved," Almerico says. "That puts the earliest actual launch date for an equity crowdfunding portal no earlier than April 4, 2014."
Almerico notes that FINRA did a commendable job streamlining the regulatory process for funding portals. "Some were worried that FINRA might require funding portal representatives to be licensed and to take an exam like the Series 7," the crowdfunding expert stated. "But FINRA did a good job of keeping the rules for funding portals as simple as possible."
FINRA is the Financial Industry Regulatory Authority and is dedicated to investor protection and market integrity through effective and efficient regulation of the securities industry. Almerico says that FINRA is not part of the government, but rather is an independent, not-for-profit organization authorized by Congress to protect America’s investors by making sure the securities industry operates fairly and honestly. "FINRA writes and enforces rules governing the activities of more than 4,200 securities firms with approximately 630,000 brokers and assures compliance with their rules," Almerico says.
About Kendall Almerico:
Kendall Almerico is a nationally recognized crowdfunding expert and JOBS Act expert who has appeared in USA Today, Huffington Post, the New York Daily News, Business Insider, Fox Business Network and hundreds of newspaper, blog, radio and television interviews including CNN and The Sean Hannity Show. Almerico is also CEO of http://www.ClickStartMe.com, a crowdfunding site that provides individuals and businesses with an easy-to-use website to raise funds through online crowd funding. Almerico is also the founder of http://www.CrowdItForward.com, a charity-based crowd funding site that performs “Random Acts of Crowdfunding” and raises money for people in need through a 501(c)(3) charitable foundation.
Almerico is available for interviews and speaking engagements and may be reached by e-mailing media(at)clickstartme(dot)com or by calling 813.410.4658.