May 7, 2012
We formed CrowdFund Capital Markets to provide transaction services to crowd fund investment intermediaries. As participants in the newly formed crowdfund investment industry, we recognize the need to work cooperatively with the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Association (FINRA), and while not required under the law, The National Association of Securities Administrators (NASAA). This cooperation must extend not only to the definition of the regulatory frameworks which will govern our nascent industry, but in proactively supporting and facilitating the information exchange and systems required for the monitoring and enforcement of our industrys activities.
We believe in open, transparent, and appropriately regulated financial markets, and recognize that in order to function effectively regulators will be required to devote considerable resources to this effort. We further believe it is incumbent upon the industry to provide tools and technologies that will facilitate these efforts. We recognize that regulatory resources, both financial and technological, could otherwise be overwhelmed by the the costs and resource requirements of developing appropriate infrastructure.
As such, we propose that the CrowdFund Investment Industry create and provide to the regulatory community the following platforms. We further propose that these systems be developed, maintained, and operated by the industry.
We further propose and offer to assist the regulatory community to define, and then to create information systems in support of regulatory activities related to Section 4(6) of the Jobs Act, databases and related web interfaces (and APIs, if required) and to make these available to any and all regulatory community members AND members of the public. These include information systems which will provide timely, accurate, and validated information related to:
1. All website operators personnel seeking to act as CrowdFund Intermediaries (as the commission may determine).
2. All entrepreneurs seeking to raise capital.
3. The offering documents(as the commission may determine) related to any attempted offering to sell securities, including successful and unsuccessful offerings.
The proposed systems will not create an undue financial or regulatory burden on industry participants, in fact we believe that they will help create a platform for open, transparent, and ethical conduct of an emerging sector of the capital markets. We further believe it is the responsibility of the CrowdFund Investment Industry to assist regulatory community members and the public to ensure fully transparent markets that conform to standardized methods of operations and information systems such as used within other capital market segments and the regulatory community.
We appreciate the opportunity to provide our comments as you define the regulatory framework, and the systems and technologies which will be required to effectively regulate this potentially vital industry. We look forward to assisting the Commission toward this shared objective.