Notice2022-05200
Proposed Collection; Comment Request
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 11, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 48 (Friday, March 11, 2022)</title>
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[Federal Register Volume 87, Number 48 (Friday, March 11, 2022)]
[Notices]
[Pages 14068-14069]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-05200]
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SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-774, OMB Control No. 3235-0726]
Proposed Collection; Comment Request
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC
20549-2736.
Extension:
Rules 300-304 of Regulation Crowdfunding (Intermediaries).
Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') is soliciting comments on the collection of
information provided for Rule 17Ab2-1 (17 CFR 240.17Ab2-1) and Form CA-
1: Registration of Clearing Agencies (17 CFR 249b.200) under the
Securities Exchange Act of 1934 (``Exchange Act'') (15 U.S.C. 78a et
seq.). The Commission plans to submit this existing collection of
information to the Office of Management and Budget (``OMB'') for
extension and approval.
Rules 300-304 of Regulation Crowdfunding enumerate the requirements
with which intermediaries must comply to participate in the offer and
sale of securities in reliance on Section 4(a)(6) of the Securities Act
of 1933 (``Section 4(a)(6)''). Rule 300 requires an intermediary to be
registered with the Commission as a broker or as a funding portal and
be a member of a registered national securities association.\1\
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\1\ Currently, FINRA is the only registered national securities
association.
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Rule 301 requires intermediaries to have a reasonable basis for
believing that an issuer seeking to offer and sell securities in
reliance on Section 4(a)(6) through the intermediary's platform
complies with the requirements in Section 4A(b) of the Securities Act
and the related requirements in Regulation Crowdfunding. Rule 302
provides that no intermediary or associated person of an intermediary
may accept an investment commitment in a transaction involving the
offer or sale of securities made in reliance on Section 4(a)(6) until
the investor has opened an account with the intermediary and the
intermediary has obtained from the investor consent to electronic
delivery of materials. Rule 303 requires an intermediary to make
publicly available on its platform the information that an issuer of
crowdfunding securities is required to provide to potential investors,
in a manner that reasonably permits a person accessing the platform to
save, download, or otherwise store the information, for a minimum of 21
days before any securities are sold in the offering, during which time
the intermediary may accept investment commitments. Rule 303 also
requires intermediaries to comply with the requirements related to the
maintenance and transmission of funds. An intermediary that is a
registered broker is required to comply with the requirements of Rule
15c2-4 of the Securities Exchange Act of 1934 (``Exchange Act'')
(Transmission or Maintenance of Payments Received in Connection with
Underwritings).\2\ An intermediary that is a registered funding portal
must direct investors to transmit
[[Page 14069]]
the money or other consideration directly to a qualified third party
that has agreed in writing to hold the funds for the benefit of, and to
promptly transmit or return the funds to, the persons entitled thereto
in accordance with Regulation Crowdfunding.
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\2\ 17 CFR 240.15c2-4.
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The rules also require intermediaries to implement and maintain
systems to comply with the information disclosure, communication
channels, and investor notification requirements. These requirements
include providing disclosure about compensation at account opening
(Rule 302), obtaining investor acknowledgements to confirm investor
qualifications and review of educational materials (Rule 303),
providing investor questionnaires (Rule 303), providing communication
channels with third parties and among investors (Rule 303), notifying
investors of investment commitments (Rule 303), confirming completed
transactions (Rule 303) and confirming or reconfirming offering
cancellations (Rule 304).
The Commission staff estimates that there will be 136
intermediaries engaged in crowdfunding activity and therefore subject
to Rules 300-304. The Commission staff estimates the annualized
industry burden will be 38,317 hours to comply with Rules 300-304. The
Commission staff further estimates that the costs associated with
complying with Rules 300-304 will be a total amount of $18,750,000.
Written comments are invited on: (a) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the Commission, including whether the information
shall have practical utility; (b) the accuracy of the Commission's
estimates of the burden of the proposed collection of information; (c)
ways to enhance the quality, utility, and clarity of the information to
be collected; and (d) ways to minimize the burden of the collection of
information on respondents, including through the use of automated
collection techniques or other forms of information technology.
Consideration will be given to comments and suggestions submitted in
writing by May 10, 2022.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information under the PRA unless it
displays a currently valid OMB control number.
Please direct your written comments to: David Bottom, Director/
Chief Information Officer, Securities and Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington, DC 20549, or send an email to:
<a href="/cdn-cgi/l/email-protection#19494b5846547870757b7661596a7c7a377e766f"><span class="__cf_email__" data-cfemail="7d2d2f3c22301c14111f12053d0e181e531a120b">[email protected]</span></a>.
Dated: March 8, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-05200 Filed 3-10-22; 8:45 am]
BILLING CODE 8011-01-P
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