FINRA Starts Their Process for Portal Registration
Kudos to FINRA for being proactive at its December 7 Board meeting and authorizing the issuance of an interim form seeking information from prospective funding portals intending to apply for membership with FINRA pursuant to the JOBS Act. This type of proactive approach at a time when the SEC seems disinclined to provide evidence of progress on its own rule-making is a very good sign that FINRA is on top of the task. FINRA could be using the SEC stalls as cover for failing to move forward with activities it well knows it needs to do regardless of the content of those rules. Instead, prospective funding portals will apparently be able to file an interim form with FINRA voluntarily FINRA will file the interim form with the SEC. This could serve as an important early indicator of the size of this new sector. Many have been concerned that there is no deadline for FINRA to put a portal registration process in place and that this could act to extreme advantage of existing broker-dealers who might be active in the crowdfunding space long before portals can even register. Because those broker-dealers are existing paying FINRA members, some amount of concern seems warranted. This may prove to be nothing more than window dressing by FINRA and I will certainly follow-up with some thoughts as to whether the process is moving forward. However, FINRA could be saying and doing nothing right now and merely pointing to the absence of guidance from the SEC as cover. The fact that this process has board-level attention is very positive and I commend them for doing what they can in a timely and proactive way.