May 11, 2012
In regards to Sec. 4A(a)(1)(B): a funding portal (as defined in section 3(a)(80) of the Securities Exchange Act of 1934)
There is no indication from this simple statement what will be involved or required in registering as a funding portal. The Act referenced defines funding portal as:
(80) FUNDING PORTAL.—The term funding portal means any person acting as an intermediary in a transaction involving the offer or sale of securities for the account of others, solely pursuant to section 4(6) of the Securities Act of 1933 (15 U.S.C. 77d(6) 10), that does not—
(A) offer investment advice or recommendations
(B) solicit purchases, sales, or offers to buy the securities offered or displayed on its website or portal
(C) compensate employees, agents, or other persons for such solicitation or based on the sale of securities displayed or referenced on its website or portal
(D) hold, manage, possess, or otherwise handle investor funds or securities or
(E) engage in such other activities as the Commission, by rule, determines appropriate.
We expect the rules will outline what will be required of funding portals as part of their registration with the Commission and the draft of these rules should be made available for review and comment as early as possible to allow prospective funding portals to know whether they will qualify and to be fully prepared to register when the time comes. There is a great deal of expense involved in creating a platform that will comply with every aspect of the rules as they are eventually put into place.