{"id":5736,"date":"2019-12-04T14:22:00","date_gmt":"2019-12-04T06:22:00","guid":{"rendered":"https:\/\/pnl-law.com\/blog\/?p=5736"},"modified":"2020-05-04T17:29:08","modified_gmt":"2020-05-04T09:29:08","slug":"permitted-activities-for-crowdfunding-intermediaries","status":"publish","type":"post","link":"https:\/\/pnl-law.com\/blog\/permitted-activities-for-crowdfunding-intermediaries\/","title":{"rendered":"Permitted Activities for Crowdfunding Intermediaries"},"content":{"rendered":"\n

A crowdfunding intermediary<\/a> is the entity that mediates offer and sale of crowdfunding securities<\/a> through its online electronic platform<\/a>. A crowdfunding intermediary may be a: (a) registered broker<\/a>; (b) investment house<\/a>; or (c) funding portal<\/a>. Continue reading below for the list of permitted activities for crowdfunding intermediaries.<\/p>\n\n\n\n\n\n\n\n

Related discussions:
* Introduction of crowdfunding in the Philippines<\/a>
* Registration of crowdfunding intermediary<\/a>
* Disqualification of intermediaries<\/a>
* Ongoing obligations of intermediaries<\/a>
* Prudential requirements of intermediaries<\/a>
* Measures to reduce risk of fraud<\/a><\/td>
* Account opening requirements<\/a>
* Requirements for crowdfunding transactions<\/a>
* Completion of offerings, cancellations, reconfirmations<\/a>
* Eligibility for exemption from registration of securities<\/a>
* Registration of funding portals<\/a>
* Registration of crowdfunding Issuers<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

ISSUER SELECTION<\/h2>\n\n\n\n

Determine whether and under what terms to allow an issuer to offer and sell securities<\/a> in reliance on the Crowdfunding Rules<\/em> through its platform. <\/p>\n\n\n\n

HIGHLIGHTING OFFERINGS<\/h2>\n\n\n\n

Apply objective criteria to highlight offerings on the platform<\/a> where: <\/p>\n\n\n\n

  1. The criteria are (i) reasonably designed to highlight a broad selection of issuers<\/a> offering securities<\/a> through the funding portal\u2019s platform; (ii) applied consistently to all issuers and offerings; and (iii) clearly displayed on the funding portal\u2019s platform.<\/li><\/ol>\n\n\n\n
    1. The criteria may include, among other things, the type of securities being offered (for example, common stock<\/a>, preferred stock<\/a> or debt securities); the geographic location of the issuer; the industry or business segment of the issuer; the number or amount of investment commitments made, progress in meeting the issuer\u2019s target offering amount or, if applicable, the maximum offering amount; and the minimum or maximum investment amount; provided that the funding portal may not highlight an issuer or offering based on the advisability of investing in the issuer or its offering; and <\/li><\/ol>\n\n\n\n
      1. The funding portal does not receive special or additional compensations for highlighting one or more issuers or offerings on its platform; <\/li><\/ol>\n\n\n\n

        TOOLS FOR INVESTORS<\/h2>\n\n\n\n

        Provide search functions or other tools that investors can use to search, sort, or categorize the offerings available through the funding portal\u2019s platform according to objective criteria where; <\/p>\n\n\n\n

        1. The criteria may include, among other things, the type of securities being offered (for example, common stock, preferred stock or debt securities); the geographic location of the issuer; the industry or business segment of the issuer; the number or amount of investment commitments made, progress in meeting the issuer\u2019s target offering amount or, if applicable, the maximum offering amount; and the minimum or maximum investment amount; and <\/li><\/ol>\n\n\n\n
          1. The criteria may not include, among other things, the advisability of investing in the issuer or its offering, or an assessment of any characteristic of the issuer, its business plan, its key management or risks associated with an investment;<\/li><\/ol>\n\n\n\n

            COMMUNICATION CHANNELS<\/h2>\n\n\n\n

            Provide communication channels by which investors<\/a> can communicate with one another and with representatives of the issuer<\/a> through the funding portal\u2019s platform<\/a> about offerings through the platform, so long as the funding portal: <\/p>\n\n\n\n

            1. Does not participate in these communications, other than to establish guidelines for communication and remove abusive or potentially fraudulent communications; <\/li><\/ol>\n\n\n\n
              1. Permits public access to view the discussions made in the communication channels;
                <\/li>
              2. Restricts posting of comments in the communication channels to those persons who have opened an account on its platform; and
                <\/li>
              3. Requires that any person posting a comment in the communication channels clearly disclose with each posting whether he or she is a founder or an employee of an issuer engaging in promotional activities on behalf of the issuer, or is otherwise compensated, whether in the past or prospectively, to promote an issuer\u2019s offering; <\/li><\/ol>\n\n\n\n

                ADVISING THE ISSUER<\/h2>\n\n\n\n

                Advise an issuer<\/a> about the structure or content of the issuer\u2019s offering, including assisting the issuer in preparing offering documentation.<\/p>\n\n\n\n

                PROMOTERS<\/h2>\n\n\n\n

                Compensate a third party for referring a person to the funding portal, so long as the third party does not provide the funding portal with sensitive personal information of any potential investor, and the compensation, other than that paid to a registered broker, is not based, directly or indirectly, on the purchase or sale of a security in reliance on the Crowdfunding Rules<\/em> offered on or through the funding portal\u2019s platform.<\/p>\n\n\n\n

                Pay or offer to pay any compensation to a registered broker for services, including referrals pursuant to paragraph (F) of this section, in connection with the offer or sale of securities by the funding portal in reliance on these Rules, provided that: <\/p>\n\n\n\n