Crowdfunding Portals pertain to Regulation Crowdfunding (CF) and is one of the key investor protections of Title III of the JOBS Act of 2012. Regulation CF transactions must take place through an SEC-registered intermediary – either a funding portal or a registered broker-dealer. Broker-dealers are less likely to serve as a portal/intermediary in a Title III Crowdfunding campaign because they involve such small amounts (i.e., $1 million or less) with little financial incentive.

Enter the funding portal. A funding portal is a new type of SEC registrant created to facilitate crowdfunding transactions. A funding portal must: (A) register with the SEC as a funding portal, and (B) gain membership in a national securities association (i.e., FINRA). Funding Portals register with the SEC by filing Form Funding Portal. The Form Funding Portal requires the disclosure of information consistent with, but less extensive than, the information required for broker-dealers on Form BD.

• Their sole purpose is to act as intermediaries in transactions involving the offer or sale of crowdfunded securities
• Unless registered as a broker-dealer or an investment adviser, a funding portal cannot offer investment advice or recommendations
• A funding portal is not permitted to highlight "recommended" offerings or describe interesting or novel offerings
• A funding portal does not play the role of a securities salesperson
• A portal is not permitted to solicit purchases, sales or offers to buy the securities offered ordisplayed on its website

Regulation Crowdfunding Rule 301(c)(2) requires a funding portal to deny access to its platform if the funding portal has a reasonable basis to believe that the issuer presents the potential for fraud or raises concerns about investor protection. The crowdfunding regulatory regime relies on the ability of funding portal intermediaries to effectively vet issuers and ensure compliance with disclosure requirements to prospective investors.

For a list of current Funding Portals registered with the SEC and members of FINRA, visit Crowdfunding Portals.