cfr_sections
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22 rows where part_number = 227 and title_number = 17 sorted by section_id
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| section_id ▼ | title_number | title_name | chapter | subchapter | part_number | part_name | subpart | subpart_name | section_number | section_heading | agency | authority | source_citation | amendment_citations | full_text |
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| 17:17:3.0.1.1.10.1.38.1 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | A | Subpart A—General | § 227.100 Crowdfunding exemption and requirements. | SEC | [80 FR 71537, Nov. 16, 2015, as amended at 82 FR 17552, Apr. 12, 2017; 85 FR 27131, May 7, 2020; 85 FR 54490, Sept. 2, 2020; 86 FR 3590, Jan. 14, 2021; 87 FR 57398, Sept. 20, 2022] | (a) Exemption. An issuer may offer or sell securities in reliance on section 4(a)(6) of the Securities Act of 1933 (the “Securities Act”) (15 U.S.C. 77d(a)(6)), provided that: (1) The aggregate amount of securities sold to all investors by the issuer in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) during the 12-month period preceding the date of such offer or sale, including the securities offered in such transaction, shall not exceed $5,000,000; (2) Where the purchaser is not an accredited investor (as defined in Rule 501 (§ 230.501 of this chapter)), the aggregate amount of securities sold to such an investor across all issuers in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) during the 12-month period preceding the date of such transaction, including the securities sold to such investor in such transaction, shall not exceed: (i) The greater of $2,500, or 5 percent of the greater of the investor's annual income or net worth, if either the investor's annual income or net worth is less than $124,000; or (ii) Ten percent of the greater of the investor's annual income or net worth, not to exceed an amount sold of $124,000, if both the investor's annual income and net worth are equal to or more than $124,000; Instruction 1 to paragraph (a)(2). To determine the investment limit for a natural person, the person's annual income and net worth shall be calculated as those values are calculated for purposes of determining accredited investor status in accordance with § 230.501 of this chapter. Instruction 2 to paragraph (a)(2). A person's annual income and net worth may be calculated jointly with that person's spouse; however, when such a joint calculation is used, the aggregate investment of the investor spouses may not exceed the limit that would apply to an individual investor at that income or net worth level. Instruction 3 to paragraph (a)(2). An issuer offering and selling securities in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a… | ||||
| 17:17:3.0.1.1.10.2.38.1 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | B | Subpart B—Requirements for Issuers | § 227.201 Disclosure requirements. | SEC | [80 FR 71537, Nov. 16, 2015, as amended at 82 FR 17552, Apr. 12, 2017; 85 FR 27131, May 7, 2020; 85 FR 54490, Sept. 2, 2020; 86 FR 3590, 3591, Jan. 14, 2021; 87 FR 57398, Sept. 20, 2022] | An issuer offering or selling securities in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) and in accordance with section 4A of the Securities Act (15 U.S.C. 77d-1) and this part, and any co-issuer jointly offering or selling securities with such an issuer in reliance on the same, must file with the Commission and provide to investors and the relevant intermediary the following information: (a) The name, legal status (including its form of organization, jurisdiction in which it is organized and date of organization), physical address and Web site of the issuer; (b) The names of the directors and officers (and any persons occupying a similar status or performing a similar function) of the issuer, all positions and offices with the issuer held by such persons, the period of time in which such persons served in the position or office and their business experience during the past three years, including: (1) Each person's principal occupation and employment, including whether any officer is employed by another employer; and (2) The name and principal business of any corporation or other organization in which such occupation and employment took place. Instruction to paragraph (b). For purposes of this paragraph (b), the term officer means a president, vice president, secretary, treasurer or principal financial officer, comptroller or principal accounting officer, and any person routinely performing similar functions. (c) The name of each person, as of the most recent practicable date but no earlier than 120 days prior to the date the offering statement or report is filed, who is a beneficial owner of 20 percent or more of the issuer's outstanding voting equity securities, calculated on the basis of voting power; (d) A description of the business of the issuer and the anticipated business plan of the issuer; (e) The current number of employees of the issuer; (f) A discussion of the material factors that make an investment in the issuer speculative or risky; (g) The target offering a… | ||||
| 17:17:3.0.1.1.10.2.38.2 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | B | Subpart B—Requirements for Issuers | § 227.202 Ongoing reporting requirements. | SEC | [80 FR 71537, Nov. 16, 2015, as amended at 82 FR 45725, Oct. 2, 2017; 83 FR 47836, Sept. 21, 2018; 83 FR 52964, Oct. 19, 2018; 85 FR 17751, Mar. 31, 2020] | (a) An issuer that has offered and sold securities in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) and in accordance with section 4A of the Securities Act (15 U.S.C. 77d-1) and this part must file with the Commission and post on the issuer's Web site an annual report along with the financial statements of the issuer certified by the principal executive officer of the issuer to be true and complete in all material respects and a description of the financial condition of the issuer as described in § 227.201(s). If, however, an issuer has available financial statements that have either been reviewed or audited by a public accountant that is independent of the issuer, those financial statements must be provided and the certification by the principal executive officer will not be required. The annual report also must include the disclosure required by paragraphs (a), (b), (c), (d), (e), (f), (m), (p), (q), (r), and (x) of § 227.201. The report must be filed in accordance with the requirements of § 227.203 and Form C (§ 239.900 of this chapter) and no later than 120 days after the end of the fiscal year covered by the report. Instruction 1 to paragraph (a). Instructions (3), (8), (9), (10), and (11) to paragraph (t) of § 227.201 shall apply for purposes of this section. Instruction 2 to paragraph (a). An issuer providing financial statements that are not audited or reviewed must have its principal executive officer provide the following certification: I, [identify the certifying individual], certify that the financial statements of [identify the issuer] included in this Form are true and complete in all material respects. [Signature and title]. (b) An issuer must continue to comply with the ongoing reporting requirements until one of the following occurs: (1) The issuer is required to file reports under section 13(a) or section 15(d) of the Exchange Act (15 U.S.C. 78m(a) or 78o(d)); (2) The issuer has filed, since its most recent sale of securities pursuant to this part, at least one… | ||||
| 17:17:3.0.1.1.10.2.38.3 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | B | Subpart B—Requirements for Issuers | § 227.203 Filing requirements and form. | SEC | [80 FR 71537, Nov. 16, 2015, as amended at 86 FR 3591, Jan. 14, 2021] | (a) Form C—Offering statement and amendments (§ 239.900 of this chapter). (1) Offering statement. Except as allowed by § 227.206, an issuer offering or selling securities in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) and in accordance with section 4A of the Securities Act (15 U.S.C. 77d-1) and this part, and any co-issuer jointly offering or selling securities with such an issuer in reliance on the same, must file with the Commission and provide to investors and the relevant intermediary a Form C: Offering Statement (Form C) (§ 239.900 of this chapter) prior to the commencement of the offering of securities. An issuer that is both offering or selling securities with a co-issuer and separately offering or selling securities on its own must file with the Commission and provide to investors and the relevant intermediary a separate Form C for such offering. Every Form C must include the information required by § 227.201. (2) Amendments to offering statement. An issuer must file with the Commission and provide to investors and the relevant intermediary an amendment to the offering statement filed on Form C (§ 239.900 of this chapter) to disclose any material changes, additions or updates to information that it provides to investors through the intermediary's platform, for any offering that has not yet been completed or terminated. The amendment must be filed on Form C: Amendment (Form C/A) (§ 239.900 of this chapter), and if the amendment reflects material changes, additions or updates, the issuer shall check the box indicating that investors must reconfirm an investment commitment within five business days or the investor's commitment will be considered cancelled. (3) Progress updates. (i) An issuer must file with the Commission and provide to investors and the relevant intermediary a Form C: Progress Update (Form C-U) (§ 239.900 of this chapter) to disclose its progress in meeting the target offering amount no later than five business days after each of the dates when the issu… | ||||
| 17:17:3.0.1.1.10.2.38.4 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | B | Subpart B—Requirements for Issuers | § 227.204 Advertising. | SEC | [80 FR 71537, Nov. 16, 2015, as amended at 86 FR 3592, Jan. 14, 2021] | (a)(1) An issuer may not, directly or indirectly, advertise the terms of an offering made in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)), except for oral or written communications that meet the requirements of paragraph (b) of this section or of § 227.206. (2) Instruction to paragraph (a). For purposes of this paragraph (a), issuer includes persons acting on behalf of the issuer. (b) A notice may advertise any of the terms of an issuer's offering made in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) if it directs investors to the intermediary's platform and includes no more than the following information: (1) A statement that the issuer is conducting an offering pursuant to section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)), the name of the intermediary through which the offering is being conducted, and information (including a link in any written communications) directing the potential investor to the intermediary's platform; (2) The terms of the offering; and (3) 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 Web site of the issuer, the email address of a representative of the issuer and a brief description of the business of the issuer. (c) 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. Persons acting on behalf of the issuer must identify their affiliation with the issuer in all communications on the intermediary's platform. (d) Notwithstanding the requirement that a notice advertising any of the terms of an issuer's offering made in reliance on section 4(a)(6) of the Securities Act (1… | ||||
| 17:17:3.0.1.1.10.2.38.5 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | B | Subpart B—Requirements for Issuers | § 227.205 Promoter compensation. | SEC | (a) An issuer, or person acting on behalf of the issuer, shall be permitted to compensate or commit to compensate, directly or indirectly, any person to promote the issuer's offerings made in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) through communication channels provided by an intermediary on the intermediary's platform, but only if the issuer or person acting on behalf of the issuer, takes reasonable steps to ensure that the person promoting the offering clearly discloses the receipt, past or prospective, of such compensation with any such communication. Instruction to paragraph (a). The disclosure required by this paragraph is required, with each communication, for persons engaging in promotional activities on behalf of the issuer through the communication channels provided by the intermediary, regardless of whether or not the compensation they receive is specifically for the promotional activities. This includes persons hired specifically to promote the offering as well as to persons who are otherwise employed by the issuer or who undertake promotional activities on behalf of the issuer. (b) Other than as set forth in paragraph (a) of this section, an issuer or person acting on behalf of the issuer shall not compensate or commit to compensate, directly or indirectly, any person to promote the issuer's offerings made in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)), unless such promotion is limited to notices permitted by, and in compliance with, § 227.204. | |||||
| 17:17:3.0.1.1.10.2.38.6 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | B | Subpart B—Requirements for Issuers | § 227.206 Solicitations of interest and other communications. | SEC | [86 FR 3592, Jan. 14, 2021] | (a) Solicitation of interest. At any time before the filing of an offering statement, an issuer may communicate orally or in writing to determine whether there is any interest in a contemplated securities offering. Such communications are deemed to be an offer of a security for sale for purposes of the antifraud provisions of the Federal securities laws. No solicitation or acceptance of money or other consideration, nor of any commitment, binding or otherwise, from any person is permitted until the offering statement is filed. (b) Conditions. The communications must: (1) State that no money or other consideration is being solicited, and if sent in response, will not be accepted; (2) State that no offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement is filed and only through an intermediary's platform; and (3) State that a person's indication of interest involves no obligation or commitment of any kind. (c) Indications of interest. Any written communication under this section may include a means by which a person may indicate to the issuer that such person is interested in a potential offering. This issuer may require the name, address, telephone number, and/or email address in any response form included pursuant to this paragraph (c). | ||||
| 17:17:3.0.1.1.10.3.38.1 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | C | Subpart C—Requirements for Intermediaries | § 227.300 Intermediaries. | SEC | (a) Requirements. A person acting as an intermediary in a transaction involving the offer or sale of securities in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) must: (1) Be registered with the Commission as a broker under section 15(b) of the Exchange Act (15 U.S.C. 78 o (b)) or as a funding portal in accordance with the requirements of § 227.400; and (2) Be a member a national securities association registered under section 15A of the Exchange Act (15 U.S.C. 78 o -3). (b) Financial interests. Any director, officer or partner of an intermediary, or any person occupying a similar status or performing a similar function, may not have a financial interest in an issuer that is offering or selling securities in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) through the intermediary's platform, or receive a financial interest in an issuer as compensation for the services provided to or for the benefit of the issuer in connection with the offer or sale of such securities. An intermediary may not have a financial interest in an issuer that is offering or selling securities in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) through the intermediary's platform unless: (1) The intermediary receives the financial interest from the issuer as compensation for the services provided to, or for the benefit of, the issuer in connection with the offer or sale of the securities being offered or sold in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) through the intermediary's platform; and (2) the financial interest consists of securities of the same class and having the same terms, conditions and rights as the securities being offered or sold in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) through the intermediary's platform. For purposes of this paragraph, a financial interest in an issuer means a direct or indirect ownership of, or economic interest in, any class of the issuer's securities. (c… | |||||
| 17:17:3.0.1.1.10.3.38.2 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | C | Subpart C—Requirements for Intermediaries | § 227.301 Measures to reduce risk of fraud. | SEC | [80 FR 71537, Nov. 16, 2015, as amended at 85 FR 27132, May 7, 2020; 85 FR 54490, Sept. 2, 2020; 86 FR 3592, Jan. 14, 2021] | An intermediary in a transaction involving the offer or sale of securities in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) must: (a) Have a reasonable basis for believing that an issuer seeking to offer and sell securities in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) through the intermediary's platform complies with the requirements in section 4A(b) of the Act (15 U.S.C. 77d-1(b)) and the related requirements in this part. In satisfying this requirement, an intermediary may rely on the representations of the issuer concerning compliance with these requirements unless the intermediary has reason to question the reliability of those representations; (b) Have a reasonable basis for believing that the issuer has established means to keep accurate records of the holders of the securities it would offer and sell through the intermediary's platform, provided that an intermediary may rely on the representations of the issuer concerning its means of recordkeeping unless the intermediary has reason to question the reliability of those representations. An intermediary will be deemed to have satisfied this requirement if the issuer has engaged the services of a transfer agent that is registered under Section 17A of the Exchange Act (15 U.S.C. 78q-1(c)). (c) Deny access to its platform to an issuer if the intermediary: (1) Has a reasonable basis for believing that the issuer or any of its officers, directors (or any person occupying a similar status or performing a similar function) or beneficial owners of 20 percent or more of the issuer's outstanding voting equity securities, calculated on the basis of voting power, is subject to a disqualification under § 227.503. In satisfying this requirement, an intermediary must, at a minimum, conduct a background and securities enforcement regulatory history check on each issuer whose securities are to be offered by the intermediary and on each officer, director or beneficial owner of 20 percent or more of the issuer's outst… | ||||
| 17:17:3.0.1.1.10.3.38.3 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | C | Subpart C—Requirements for Intermediaries | § 227.302 Account opening. | SEC | (a) Accounts and electronic delivery. (1) No intermediary or associated person of an intermediary may accept an investment commitment in a transaction involving the offer or sale of securities in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) until the investor has opened an account with the intermediary and the intermediary has obtained from the investor consent to electronic delivery of materials. (2) An intermediary must provide all information that is required to be provided by the intermediary under subpart C of this part (§§ 227.300 through 227.305), including, but not limited to, educational materials, notices and confirmations, through electronic means. Unless otherwise indicated in the relevant rule of subpart C of this part, in satisfying this requirement, an intermediary must provide the information through an electronic message that contains the information, through an electronic message that includes a specific link to the information as posted on intermediary's platform, or through an electronic message that provides notice of what the information is and that it is located on the intermediary's platform or on the issuer's Web site. Electronic messages include, but are not limited to, email, social media messages, instant messages or other electronic media messages. (b) Educational materials. (1) In connection with establishing an account for an investor, an intermediary must deliver educational materials to such investor that explain in plain language and are otherwise designed to communicate effectively and accurately: (i) The process for the offer, purchase and issuance of securities through the intermediary and the risks associated with purchasing securities offered and sold in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)); (ii) The types of securities offered and sold in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) available for purchase on the intermediary's platform and the risks associated with each type of … | |||||
| 17:17:3.0.1.1.10.3.38.4 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | C | Subpart C—Requirements for Intermediaries | § 227.303 Requirements with respect to transactions. | SEC | [80 FR 71537, Nov. 16, 2015, as amended at 85 FR 27132, May 7, 2020; 85 FR 54490, Sept. 2, 2020; 86 FR 3592, Jan. 14, 2021] | (a) Issuer information. An intermediary in a transaction involving the offer or sale of securities in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) must make available to the Commission and to investors any information required to be provided by the issuer of the securities under §§ 227.201 and 227.203(a). (1) This information must be made publicly available on the intermediary's platform, in a manner that reasonably permits a person accessing the platform to save, download, or otherwise store the information; (2) This information must be made publicly available on the intermediary's platform for a minimum of 21 days before any securities are sold in the offering, during which time the intermediary may accept investment commitments; (3) This information, including any additional information provided by the issuer, must remain publicly available on the intermediary's platform until the offer and sale of securities in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) is completed or cancelled; and (4) An intermediary may not require any person to establish an account with the intermediary to access this information. (b) Investor qualification. Each time before accepting any investment commitment (including any additional investment commitment from the same person), an intermediary must: (1) Have a reasonable basis for believing that the investor satisfies the investment limitations established by section 4(a)(6)(B) of the Act (15 U.S.C. 77d(a)(6)(B)) and this part. An intermediary may rely on an investor's representations concerning compliance with the investment limitation requirements concerning the investor's annual income, net worth, and the amount of the investor's other investments made pursuant to section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) unless the intermediary has reason to question the reliability of the representation. (2) Obtain from the investor: (i) A representation that the investor has reviewed the intermediary's education… | ||||
| 17:17:3.0.1.1.10.3.38.5 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | C | Subpart C—Requirements for Intermediaries | § 227.304 Completion of offerings, cancellations and reconfirmations. | SEC | [80 FR 71537, Nov. 16, 2015, as amended at 85 FR 27132, May 7, 2020; 85 FR 54490, Sept. 2, 2020; 86 FR 3592, Jan. 14, 2021] | (a) Generally. An investor may cancel an investment commitment for any reason until 48 hours prior to the deadline identified in the issuer's offering materials. During the 48 hours prior to such deadline, an investment commitment may not be cancelled except as provided in paragraph (c) of this section. (b) Early completion of offering. If an issuer reaches the target offering amount prior to the deadline identified in its offering materials pursuant to § 227.201(g), the issuer may close the offering on a date earlier than the deadline identified in its offering materials pursuant to § 227.201(g), provided that: (1) The offering remains open for a minimum of 21 days pursuant to § 227.303(a); (2) The intermediary provides notice to any potential investors, and gives or sends notice to investors that have made investment commitments in the offering, of: (i) The new, anticipated deadline of the offering; (ii) The right of investors to cancel investment commitments for any reason until 48 hours prior to the new offering deadline; and (iii) Whether the issuer will continue to accept investment commitments during the 48-hour period prior to the new offering deadline. (3) The new offering deadline is scheduled for and occurs at least five business days after the notice required in paragraph (b)(2) of this section is provided; and (4) At the time of the new offering deadline, the issuer continues to meet or exceed the target offering amount. (c) Cancellations and reconfirmations based on material changes. (1) If there is a material change to the terms of an offering or to the information provided by the issuer, the intermediary must give or send to any investor who has made an investment commitment notice of the material change and that the investor's investment commitment will be cancelled unless the investor reconfirms his or her investment commitment within five business days of receipt of the notice. If the investor fails to reconfirm his or her investment within those five business days, the intermed… | ||||
| 17:17:3.0.1.1.10.3.38.6 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | C | Subpart C—Requirements for Intermediaries | § 227.305 Payments to third parties. | SEC | (a) Prohibition on payments for personally identifiable information. An intermediary may not compensate any person for providing the intermediary with the personally identifiable information of any investor or potential investor in securities offered and sold in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)). (b) For purposes of this rule, personally identifiable information means information that can be used to distinguish or trace an individual's identity, either alone or when combined with other personal or identifying information that is linked or linkable to a specific individual. | |||||
| 17:17:3.0.1.1.10.4.38.1 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | D | Subpart D—Funding Portal Regulation | § 227.400 Registration of funding portals. | SEC | (a) Registration. A funding portal must register with the Commission, by filing a complete Form Funding Portal (§ 249.2000 of this chapter) in accordance with the instructions on the form, and become a member of a national securities association registered under section 15A of the Exchange Act (15 U.S.C. 78 o -3). The registration will be effective the later of: (1) Thirty calendar days after the date that the registration is received by the Commission; or (2) The date the funding portal is approved for membership by a national securities association registered under section 15A of the Exchange Act (15 U.S.C. 78 o -3). (b) Amendments to registration. A funding portal must file an amendment to Form Funding Portal (§ 249.2000 of this chapter) within 30 days of any of the information previously submitted on Form Funding Portal becoming inaccurate for any reason. (c) Successor registration. (1) If a funding portal succeeds to and continues the business of a registered funding portal, the registration of the predecessor will remain effective as the registration of the successor if the successor, within 30 days after such succession, files a registration on Form Funding Portal (§ 249.2000 of this chapter) and the predecessor files a withdrawal on Form Funding Portal; provided, however, that the registration of the predecessor funding portal will be deemed withdrawn 45 days after registration on Form Funding Portal is filed by the successor. (2) Notwithstanding paragraph (c)(1) of this section, if a funding portal succeeds to and continues the business of a registered funding portal and the succession is based solely on a change of the predecessor's date or state of incorporation, form of organization, or composition of a partnership, the successor may, within 30 days after the succession, amend the registration of the predecessor on Form Funding Portal (§ 249.2000 of this chapter) to reflect these changes. (d) Withdrawal. A funding portal must promptly file a withdrawal of registration on Form Funding P… | |||||
| 17:17:3.0.1.1.10.4.38.2 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | D | Subpart D—Funding Portal Regulation | § 227.401 Exemption. | SEC | A funding portal that is registered with the Commission pursuant to § 227.400 is exempt from the broker registration requirements of section 15(a)(1) of the Exchange Act (15 U.S.C. 78 o (a)(1)) in connection with its activities as a funding portal. | |||||
| 17:17:3.0.1.1.10.4.38.3 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | D | Subpart D—Funding Portal Regulation | § 227.402 Conditional safe harbor. | SEC | (a) General. Under section 3(a)(80) of the Exchange Act (15 U.S.C. 78c(a)(80)), a funding portal acting as an intermediary in a transaction involving the offer or sale of securities in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) may not: offer investment advice or recommendations; solicit purchases, sales, or offers to buy the securities offered or displayed on its platform or portal; compensate employees, agents, or other persons for such solicitation or based on the sale of securities displayed or referenced on its platform or portal; hold, manage, possess, or otherwise handle investor funds or securities; or engage in such other activities as the Commission, by rule, determines appropriate. This section is intended to provide clarity with respect to the ability of a funding portal to engage in certain activities, consistent with the prohibitions under section 3(a)(80) of the Exchange Act. No presumption shall arise that a funding portal has violated the prohibitions under section 3(a)(80) of the Exchange Act or this part by reason of the funding portal or its associated persons engaging in activities in connection with the offer or sale of securities in reliance on section 4(a)(6) of the Securities Act that do not meet the conditions specified in paragraph (b) of this section. The antifraud provisions and all other applicable provisions of the federal securities laws continue to apply to the activities described in paragraph (b) of this section. (b) Permitted activities. A funding portal may, consistent with the prohibitions under section 3(a)(80) of the Exchange Act (15 U.S.C. 78c(a)(80)) and this part: (1) Determine whether and under what terms to allow an issuer to offer and sell securities in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) through its platform; provided that a funding portal otherwise complies with this part; (2) Apply objective criteria to highlight offerings on the funding portal's platform where: (i) The criteria are reasonably… | |||||
| 17:17:3.0.1.1.10.4.38.4 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | D | Subpart D—Funding Portal Regulation | § 227.403 Compliance. | SEC | (a) Policies and procedures. A funding portal must implement written policies and procedures reasonably designed to achieve compliance with the federal securities laws and the rules and regulations thereunder relating to its business as a funding portal. (b) Privacy. A funding portal must comply with the requirements of part 248 of this chapter as they apply to brokers. (c) Inspections and examinations. A funding portal shall permit the examination and inspection of all of its business and business operations that relate to its activities as a funding portal, such as its premises, systems, platforms, and records by representatives of the Commission and of the registered national securities association of which it is a member. | |||||
| 17:17:3.0.1.1.10.4.38.5 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | D | Subpart D—Funding Portal Regulation | § 227.404 Records to be made and kept by funding portals. | SEC | (a) Generally. A funding portal shall make and preserve the following records for five years, the first two years in an easily accessible place: (1) All records related to an investor who purchases or attempts to purchase securities through the funding portal; (2) All records related to issuers who offer and sell or attempt to offer and sell securities through the funding portal and the control persons of such issuers; (3) Records of all communications that occur on or through its platform; (4) All records related to persons that use communication channels provided by a funding portal to promote an issuer's securities or communicate with potential investors; (5) All records required to demonstrate compliance with the requirements of subparts C (§§ 227.300 through 227.305) and D (§§ 227.400 through 227.404) of this part; (6) All notices provided by such funding portal to issuers and investors generally through the funding portal's platform or otherwise, including, but not limited to, notices addressing hours of funding portal operations (if any), funding portal malfunctions, changes to funding portal procedures, maintenance of hardware and software, instructions pertaining to access to the funding portal and denials of, or limitations on, access to the funding portal; (7) All written agreements (or copies thereof) entered into by such funding portal relating to its business as such; (8) All daily, monthly and quarterly summaries of transactions effected through the funding portal, including: (i) Issuers for which the target offering amount has been reached and funds distributed; and (ii) Transaction volume, expressed in: (A) Number of transactions; (B) Number of securities involved in a transaction; (C) Total amounts raised by, and distributed to, issuers; and (D) Total dollar amounts raised across all issuers, expressed in U.S. dollars; and (9) A log reflecting the progress of each issuer who offers or sells securities through the funding portal toward meeting the target offering amount. (b) Or… | |||||
| 17:17:3.0.1.1.10.5.38.1 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | E | Subpart E—Miscellaneous Provisions | § 227.501 Restrictions on resales. | SEC | (a) Securities issued in a transaction exempt from registration pursuant to section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) and in accordance with section 4A of the Securities Act (15 U.S.C. 77d-1) and this part may not be transferred by any purchaser of such securities during the one-year period beginning when the securities were issued in a transaction exempt from registration pursuant to section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)), unless such securities are transferred: (1) To the issuer of the securities; (2) To an accredited investor; (3) As part of an offering registered with the Commission; or (4) To a member of the family of the purchaser or the equivalent, to a trust controlled by the purchaser, to a trust created for the benefit of a member of the family of the purchaser or the equivalent, or in connection with the death or divorce of the purchaser or other similar circumstance. (b) For purposes of this § 227.501, the term accredited investor shall mean any person who comes within any of the categories set forth in § 230.501(a) of this chapter, or who the seller reasonably believes comes within any of such categories, at the time of the sale of the securities to that person. (c) For purposes of this section, the term member of the family of the purchaser or the equivalent includes a child, stepchild, grandchild, parent, stepparent, grandparent, spouse or spousal equivalent, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the purchaser, and shall include adoptive relationships. For purposes of this paragraph (c), the term spousal equivalent means a cohabitant occupying a relationship generally equivalent to that of a spouse. | |||||
| 17:17:3.0.1.1.10.5.38.2 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | E | Subpart E—Miscellaneous Provisions | § 227.502 Insignificant deviations from a term, condition or requirement of this part (Regulation Crowdfunding). | SEC | (a) A failure to comply with a term, condition, or requirement of this part will not result in the loss of the exemption from the requirements of Section 5 of the Securities Act (15 U.S.C. 77e) for any offer or sale to a particular individual or entity, if the issuer relying on the exemption shows: (1) The failure to comply was insignificant with respect to the offering as a whole; (2) The issuer made a good faith and reasonable attempt to comply with all applicable terms, conditions and requirements of this part; and (3) The issuer did not know of such failure where the failure to comply with a term, condition or requirement of this part was the result of the failure of the intermediary to comply with the requirements of section 4A(a) of the Securities Act (15 U.S.C. 77d-1(a)) and the related rules, or such failure by the intermediary occurred solely in offerings other than the issuer's offering. (b) Paragraph (a) of this section shall not preclude the Commission from bringing an enforcement action seeking any appropriate relief for an issuer's failure to comply with all applicable terms, conditions and requirements of this part. | |||||
| 17:17:3.0.1.1.10.5.38.3 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | E | Subpart E—Miscellaneous Provisions | § 227.503 Disqualification provisions. | SEC | [80 FR 71537, Nov. 16, 2015, as amended at 86 FR 3592, Jan. 14, 2021] | (a) Disqualification events. No exemption under section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) shall be available for a sale of securities if the issuer; any predecessor of the issuer; any affiliated issuer; any director, officer, general partner or managing member of the issuer; any beneficial owner of 20 percent or more of the issuer's outstanding voting equity securities, calculated on the basis of voting power; any promoter connected with the issuer in any capacity at the time of filing, any offer after filing, or such sale; any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with such sale of securities; or any general partner, director, officer or managing member of any such solicitor: (1) Has been convicted, within 10 years before the filing of the offering statement or such sale (or five years, in the case of issuers, their predecessors and affiliated issuers), of any felony or misdemeanor: (i) In connection with the purchase or sale of any security; (ii) Involving the making of any false filing with the Commission; or (iii) Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser, funding portal or paid solicitor of purchasers of securities; (2) Is subject to any order, judgment or decree of any court of competent jurisdiction, entered within five years before the filing of the information required by section 4A(b) of the Securities Act (15 U.S.C. 77d-1(b)) or such sale that, at the time of such filing or sale, restrains or enjoins such person from engaging or continuing to engage in any conduct or practice: (i) In connection with the purchase or sale of any security; (ii) Involving the making of any false filing with the Commission; or (iii) Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser, funding portal or paid solicitor of purchasers of securities; (3) Is subje… | ||||
| 17:17:3.0.1.1.10.5.38.4 | 17 | Commodity and Securities Exchanges | II | 227 | PART 227—REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS | E | Subpart E—Miscellaneous Provisions | § 227.504 Definition of “qualified purchaser”. | SEC | [86 FR 3593, Jan. 14, 2021] | For purposes of section 18(b)(3) of the Securities Act [15 U.S.C. 77r(b)(3)], a “qualified purchaser” means any person to whom securities are offered or sold pursuant to an offering under §§ 227.100 through 227.504 (Regulation Crowdfunding). |
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CREATE TABLE cfr_sections (
section_id TEXT PRIMARY KEY,
title_number INTEGER,
title_name TEXT,
chapter TEXT,
subchapter TEXT,
part_number TEXT,
part_name TEXT,
subpart TEXT,
subpart_name TEXT,
section_number TEXT,
section_heading TEXT,
agency TEXT,
authority TEXT,
source_citation TEXT,
amendment_citations TEXT,
full_text TEXT
);
CREATE INDEX idx_cfr_title ON cfr_sections(title_number);
CREATE INDEX idx_cfr_part ON cfr_sections(part_number);
CREATE INDEX idx_cfr_agency ON cfr_sections(agency);