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Crowdfunding

 
Saturday, January 16, 2016

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.

About Red Oak Compliance Solutions

Red Oak Compliance Solutions is the global advertising review software of choice in the financial services industry. It is a comprehensive suite of SEC 17A-4 compliant features that are 100% books and records compliant and provides clients with 35% faster approvals and 70% fewer touches or better. We also offer Smart Review(SM), which solves for the storage and maintenance of disclosures, helping firms reduce risk, decrease review times, and increase the speed of distribution of marketing materials. Smart Registration(SM) automates the licensing and registration management process to help reduce regulatory risk and time spent on manual processes. Overall, Red Oak allows firms to minimize risk, reduce costs, and increase compliance review process effectiveness and efficiencies.