Report: SEC Has Received 30 Applications for Title III Crowdfunding Portals

Reg CF Title IIITitle III crowdfunding will join the other two variants of investment crowdfunding, Title II and Title IV (Reg A+) this coming May to create a more vibrant capital ladder for companies seeking to raise capital using the internet. While no exemption is perfect, both accredited crowdfunding and Reg A+ have seen growing utilization across the US.  Title III is viewed by some within the industry as critically flawed while others believe it will emerge slowly as participants adapt and find ways to accommodate the most challenging aspects of the exemption.  Several of the existing investment crowdfunding platforms have already messaged their intent to add Title III to their portfolio of options for issuing firms. Now we have some insight into what type of participation we may expect this coming May.

According to information provided to Crowdfund Insider, approximately 30 platforms have applied to the SEC having submitted the required documents to operate as a funding portal.

Of these firms, less than two dozen have completed the filing with  FINRA, Form FP-NMA.

Of all of the applications, none of them were deemed complete and remain in process. Interestingly, some of the more “visible” platforms have not (yet) submitted applications.

It also appears that regulators are keeping a close eye on Title IV/Reg A+ platforms – something that should come as no surprise to anyone in the sector.

The new world of internet finance arrives with many benefits and also challenges. For regulators, this is a new world of finance and comes with a heightened degree of caution.  To date, Title II crowdfunding fraud has been limited – an encouraging sign.

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