Notice2022-10503
Submission for OMB Review; Comment Request; Extension: Rules 300-304 of Regulation Crowdfunding (Intermediaries)
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
May 17, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 95 (Tuesday, May 17, 2022)</title>
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[Federal Register Volume 87, Number 95 (Tuesday, May 17, 2022)]
[Notices]
[Pages 29891-29892]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-10503]
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SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-774, OMB Control No. 3235-0726]
Submission for OMB Review; Comment Request; Extension: Rules 300-
304 of Regulation Crowdfunding (Intermediaries)
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC
20549-2736
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'') has submitted to the Office of Management
and Budget (``OMB'') a request for approval of extension of the
previously approved collection of information provided for in Rules
300-304 of Regulation Crowdfunding.\1\
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\1\ See Regulation Crowdfunding, Exchange Act Release No. 76324
(Oct. 30, 2015), 80 FR 71387 (Nov. 16, 2015) (Final Rule)
(``Regulation Crowdfunding'').
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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.\2\
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\2\ 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).\3\ An intermediary that is a registered funding portal
must direct investors to transmit 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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\3\ 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
[[Page 29892]]
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.
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.
The public may view background documentation for this information
collection at the following website: ><a href="http://www.reginfo.gov">www.reginfo.gov</a><. Find this
particular information collection by selecting ``Currently under 30-day
Review--Open for Public Comments'' or by using the search function.
Written comments and recommendations for the proposed information
collection should be sent by June 16, 2022 to (i)
><a href="/cdn-cgi/l/email-protection#e2afa0baccadafa0ccadabb0a3ccb1a7a1bd86879189bd8d84848b818790a28d8f80cc878d92cc858d94"><span class="__cf_email__" data-cfemail="e0ada2b8ceafada2ceafa9b2a1ceb3a5a3bf8485938bbf8f868689838592a08f8d82ce858f90ce878f96">[email protected]</span></a>< and (ii) David Bottom,
Director/Chief Information Officer, Securities and Exchange Commission,
c/o John Pezzullo, 100 F Street NE, Washington, DC 20549, or by sending
an email to: <a href="/cdn-cgi/l/email-protection#8ddddfccd2c0ece4e1efe2f5cdfee8eea3eae2fb"><span class="__cf_email__" data-cfemail="17474556485a767e7b75786f5764727439707861">[email protected]</span></a>.
Dated: May 11, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-10503 Filed 5-16-22; 8:45 am]
BILLING CODE 8011-01-P
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