Three full years have passed since the JOBS Act was signed. In this time, the SEC has translated into rules only some of the Titles within it, for example TItle II and Title V, but has not acted yet on Title III, which should open online investing to retail investors. However, in these weeks there are signs that the situation may change.
FINRA proposes that online investing portals adopt some of its existing rules (i.e. rules 100, 110, 200,300, 800, 900 and 1200, collectively, the “Funding Portal Rules”), but also the newly introduced rule 4518. According to this latter news, brokers registered with FINRA shall notify FINRA:
- prior to engaging, for the first time, in a transaction involving the offer or sale
- within 30 days of directly or indirectly controlling, or being controlled by or
With rule 4518, FINRA aims at keeping accurate track as to which of its registered broker members, if any, are engaging in activity in connection with Title III of the JOBS Act and thereby assist FINRA in carrying out its regulatory responsibilities.
If the SEC approves these proposed rules, FINRA will make them effective within 90 days.
The document released by FINRA and the letter of the six Congressmen make think that SEC rules for Title III will be soon released. Furthermore SEC Chair Mary Jo White has recently been quoted to say that Title III rules will be forthcoming. So, indeed, the long wait for said rules may be soon over.
Alois, JD. (2015). FINRA Crowdfunding Portal Rules. Crowdfundinsider
Wilson, J. (2015). Congress Begs the SEC to issue its Crowdfunding Rules. Taylor English
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About the author - Irene Tordera
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.