Crowdfunding Intermediaries

Summary

This practice note discusses the regulation of crowdfunding intermediaries. Section 4(a)(6) (15 U.S.C. § 77d) of the Securities Act of 1933, as amended (Securities Act), added by Title III of the JOBS Act (112 P.L. 106, 126 Stat. 306), provides an exemption from the registration requirements of the Securities Act for offerings of securities using a process called "crowdfunding," and requires that crowdfunding offerings be made through an intermediary, such as a registered broker-dealer (B/D) or a funding portal. This practice note briefly discusses crowdfunding and then provides an overview of the regulation of intermediaries under Regulation Crowdfunding, including their obligations to investors and the requirement that they register with a national securities association such as the Financial Industry Regulatory Authority, Inc. (FINRA).