An issuer, in relation to crowdfunding, refers to the originator, maker, obligor, or creator of the security which shall be registered with the intermediary. The issuer, while exempt from the general registration procedures for securities, must register with the crowdfunding intermediary.
REGISTRATION
An issuer offering or selling securities under the Crowdfunding Rules shall register with an intermediary and provide information enumerated below:
- Name and other details of the intermediary. There shall only be one intermediary per offering of securities under the Crowdfunding Rules.
- Nature of its business, financial condition, historical reports of operation.
- Business plan with respect to CF offering.
- Risk factors of investing in its project.
- Procedure on how to return funds if target offering is not met.
- Procedure to complete or cancel investment commitment.
DISQUALIFICATION / REVOCATION
The issuer may be disqualified, or its registration revoked, in a number of circumstances, e.g., the issuer has made any false or misleading representation of material facts in any disclosure concerning the issuer or its securities, the issuer has failed to comply with any requirements that the Intermediary may impose as a condition for application of securities for crowdfunding. For the enumeration of the grounds and the procedure, see Crowdfunding: Disqualification of Issuer, Suspension or Revocation of Registration. [See also Eligibility requirements for Issuers in Crowdfunding]
ADVERTISING
A notice may advertise any of the terms of an issuer’s offering made if it directs investors to the intermediary’s platform and includes no more than the following information:
- (a) A statement that the issuer is conducting an offering, the name of the intermediary through which the offering is being conducted and a link directing the potential investor to the intermediary’s platform;
- (b) The terms of the offering; and
- (c) Factual information about the legal identity and business location of the issuer, limited to the name of the issuer of the security, the address, phone number and website of the issuer, the e- mail address of a representative of the issuer and a brief description of the business of the issuer.
Persons acting on behalf of the issuer shall identify their affiliation with the issuer in all communications on the intermediary’s platform.
Notwithstanding the prohibition on advertising any of the terms of the offering, an issuer, and persons acting on behalf of the issuer, may communicate with investors and potential investors about the terms of the offering through communication channels provided by the intermediary on the intermediary’s platform, provided that an issuer identifies itself as the issuer in all communications.
DISCLOSURES/ REPORTORIAL REQUIREMENTS
A duly registered issuer must submit certain reports and updates. The issuer shall use Form CF for offering, progress updates, termination of reporting, amendments, and annual report. The SEC shall be furnished with a copy of the disclosures duly received by an Intermediary. The Intermediary shall also make available the disclosures provided by the Issuer on its Crowdfunding Platform.
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