The Crowdfunding Professional Association (CfPA) has posted an annual report on best practices for online capital formation under Regulation CF (Reg CF), specifically addressing Form C-AR.
Reg CF is a securities exemption that allows issuers to raise up to $5 million in an online solicitation for investors. The exemption requires disclosure by the firm, but because it is a notice filing, the offering does not need to be qualified by the Securities and Exchange Commission. The offering is hosted either by a broker-dealer or a FINRA-regulated Funding Portal. The exemption became law under the JOBS Act of 2012 and became actionable in 2016. Since that time, billions of dollars have been raised for young private firms.
The CfPA says that platforms which list Reg CF offerings should :
“incorporate language through which companies acknowledge these ongoing reporting obligations in their client agreements. To support intermediaries and to ensure consistency across the industry.”
The CfPA advises platforms to better support filing Form C-AR, an annual report required of issuers after a funding round that has historically been lightly adhered to, with many simply ignoring the requirement.
The CfPA says its aim is to reduce non-compliance, while promoting greater transparency and boosted confidence in the finance sector.
The group mentions that several platforms have already adhered to its best practices.
Brian Belley, President of the CfPA, says annual reporting is the issuer’s legal obligation. While they are not telling platforms to shoulder this responsibility, they do believe the obligation should be clear from the outset, thus reducing non-compliance and strengthening investor confidence.
“This is the kind of practical industry standard CfPA is developing,” Belley said. “By bringing stakeholders together around workable, voluntary solutions, we can improve market practices without waiting for every operational issue to be addressed through regulation.”
The CfPA also highlights the SEC’s recent Corporation Finance Interpretation (CFI 202.02) published on July 9, 2026, addressing how the Rule 202(b)(2) holder-of-record threshold applies to offerings conducted through a Special Purpose Vehicle (SPV). The CFI clarifies that a company using an SPV must count each investor to determine whether it may terminate annual reporting.
The company’s reporting obligation generally continues until there are fewer than 300 such investors.
While non-compliance with Form C-AR is rampant, the SEC has been loath to pursue enforcement actions against transgressors, as the amounts are small and more typical than not; it is a case of small firms with limited resources. At the same time, if the issuer aims to raise money online in the future, it must remain in compliance.
