
[Federal Register Volume 84, Number 26 (Thursday, February 7, 2019)]
[Notices]
[Pages 2617-2618]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-01367]


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SECURITIES AND EXCHANGE COMMISSION


Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 
20549-2736

Extension:
    Rules 300-304 of Regulation Crowdfunding (Intermediaries), SEC 
File No. 270-774, OMB Control No. 3235-0726.

    Notice is hereby given that pursuant to the Paperwork Reduction Act 
of 1995 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and Exchange 
Commission (``Commission'') has submitted to the Office of Management 
and Budget (``OMB'') a request for approval of extension of the 
previously approved collection of information provided for in Rules 
300-304 of Regulation Crowdfunding.\1\
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    \1\ See Regulation Crowdfunding, Exchange Act Release No. 76324 
(Oct. 30, 2015), 80 FR 71387 (Nov. 16, 2015) (Final Rule) 
(``Regulation Crowdfunding'').
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    Rules 300-304 of Regulation Crowdfunding enumerate the requirements 
with which intermediaries must comply to participate in the offer and 
sale of securities in reliance on Section 4(a)(6) of the Securities Act 
of 1933 (``Section 4(a)(6)''). Rule 300 requires an intermediary to be 
registered with the Commission as a broker or as a funding portal and 
be a member of a registered national securities association.\2\
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    \2\ Currently, FINRA is the only registered national securities 
association.
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    Rule 301 requires intermediaries to have a reasonable basis for 
believing that an issuer seeking to offer and sell securities in 
reliance on Section 4(a)(6) through the intermediary's platform 
complies with the requirements in Section 4A(b) of the Securities Act 
and

[[Page 2618]]

the related requirements in Regulation Crowdfunding. Rule 302 provides 
that no intermediary or associated person of an intermediary may accept 
an investment commitment in a transaction involving the offer or sale 
of securities made in reliance on Section 4(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. 
Rule 303 requires an intermediary to make publicly available on its 
platform the information that an issuer of crowdfunding securities is 
required to provide to potential investors, in a manner that reasonably 
permits a person accessing the platform to save, download or otherwise 
store the information, for a minimum of 21 days before any securities 
are sold in the offering, during which time the intermediary may accept 
investment commitments. Rule 303 also requires intermediaries to comply 
with the requirements related to the maintenance and transmission of 
funds. An intermediary that is a registered broker is required to 
comply with the requirements of Rule 15c2-4 of the Securities Exchange 
Act of 1934 (``Exchange Act'') (Transmission or Maintenance of Payments 
Received in Connection with Underwritings).\3\ An intermediary that is 
a registered funding portal must direct investors to transmit the money 
or other consideration directly to a qualified third party that has 
agreed in writing to hold the funds for the benefit of, and to promptly 
transmit or return the funds to, the persons entitled thereto in 
accordance with Regulation Crowdfunding.
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    \3\ 17 CFR 240.15c2-4.
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    The rules also require intermediaries to implement and maintain 
systems to comply with the information disclosure, communication 
channels, and investor notification requirements. These requirements 
include providing disclosure about compensation at account opening 
(Rule 302), obtaining investor acknowledgements to confirm investor 
qualifications and review of educational materials (Rule 303), 
providing investor questionnaires (Rule 303), providing communication 
channels with third parties and among investors (Rule 303), notifying 
investors of investment commitments (Rule 303), confirming completed 
transactions (Rule 303) and confirming or reconfirming offering 
cancellations (Rule 304).
    The Commission staff estimates that there would be 62 
intermediaries engaged in crowdfunding activity and therefore subject 
to Rules 300-304. The Commission staff estimates that annualized 
industry burden would be 15,621 hours to comply with Rules 300-304. 
This estimate is composed of a one-time burden for new intermediaries 
to comply with the rules and develop the platform and ongoing burdens 
associated with maintaining the platform. The Commission staff 
estimates that the costs associated with complying with Rules 300-304 
are estimated to be approximately a total amount of $5,772,327. These 
costs are composed of a one-time burden for new intermediaries to 
comply with the rules and develop the platform and ongoing burdens 
associated with maintaining the platform.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information under the PRA unless it 
displays a currently valid OMB control number.
    The public may view background documentation for this information 
collection at the following website: www.reginfo.gov. Comments should 
be directed to: (i) Desk Officer for the Securities and Exchange 
Commission, Office of Information and Regulatory Affairs, Office of 
Management and Budget, Room 10102, New Executive Office Building, 
Washington, DC 20503, or by sending an email to: 
Lindsay.M.Abate@omb.eop.gov and (ii) Charles Riddle, Acting Director/
Chief Information Officer, Securities and Exchange Commission, c/o 
Candace Kenner, 100 F Street NE, Washington, DC 20549, or by sending an 
email to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 
30 days of this notice.

    Dated: February 1, 2019.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-01367 Filed 2-6-19; 8:45 am]
BILLING CODE 8011-01-P


