Provisions of Title III of The Jumpstart Our Business (JOBS) Act in 2012 contained a provision to address today’s most popular way of raising capital; crowdfunding. The JOBS Act included a requirement for FINRA to develop rules to address the funding “portals”. As many of you may already know, the registration provisions under the SEC’s Regulation Crowdfunding and Form Funding Portal become effective on January 29, 2016.
What many of you Texans may not know is that the Texas State Securities Board initiated a jumpstart on these issues and has already adopted its own Rules for those internet based crowdfunding institutions domiciled in Texas and who are only interested in intrastate crowdfunding. You can read the Rule, which is §115.19 of the Rules and Regulations of the Texas State Securities Board here. In addition, it appears that a Texas Crowdfunding Portal Registration and Activities of Small Business Development Entities Rule will be proposed to the Members of the Texas State Securities Board. The specific language of the Rule is not yet available, but if you care to find out more information on this rule proposal can find the agenda for the January 27, 2016 meeting of the State Securities Board here. Additional information regarding the State Securities Board’s crowdfunding requirements can be found here.