Intermediaries in securities crowdfunding face significant requirements as a result of the statutory mandates of Title III of the JOBS Act. The SEC, in its proposed rules, provided structure to these requirements. The proposed rules would create strict requirements for intermediaries regarding their relationships with investors and how they undertake crowdfunding transactions under Section 4(a)(6) of the Securities Act. The proposed rules would also create and establish the guidelines for funding portals, a new type of limited purpose securities broker. While some commentators decry the SEC for placing undue burdens and legal liabilities on intermediaries in securities crowdfunding, the SEC had limited discretion in the proposed rules in regards to those issues. It is unclear what type of market will develop as a result of these rules as market participants work through the challenges and opportunities of securities crowdfunding.
Andrew D. Stephenson, Brian R. Knight & Matthew Bahleda, From Revolutionary to Palace Guard: The Role and Requirements of Intermediaries Under Proposed Regulation Crowdfunding, 3 MICH. J. PRIVATE EQUITY & VENTURE CAPITAL L. 231 (2014).