The President took swift action on equity crowdfunding today by signing the JOBS Act into law!
This final approval by the President legalizes equity crowdfunding, subject to a 9 month review, public comment, and rule-making process by the SEC. The SEC has significant latitude to revise many sections of the bill and though the version they received was negotiated with them earlier in March, the crowdfunding industry’s advocacy at this time will be vital to a successful final outcome.
To this end, leaders of the crowdfunding industry have coalesced to form a leadership group that will consider the formation of a Self Regulatory Organization (SRO) specific to the crowdfunding industry and its specific needs. Launcht was invited to be a founding member of the leadership groupthat will form the SRO and is happy to take on this role. We will work with the other founding members of the leadership groupto shape and structure the SRO. We are honored to be working with these other leaders in the field: the CAPS Crowdfunding Certification Program, Crowdfunder, Funding Roadmap, Gate Technology, Indiegogo, RocketHub, SoHo Loft, Somolend, and Startup Exemption.
At this early stage, the core work of the Leadership Group will be:
- Implementing appropriate and balanced investor protection and education
- Creating strong anti-fraud protections in the form of an Investors Bill of Rights
- Leveraging the SRO to facilitate standardized reporting and communication between Equity Crowdfunding platforms and the SEC
- Creating commonsense processes to form an orderly market and SRO for Equity Crowdfunding platforms
- Utilizing a standards-based certification process to provide Equity Crowdfunding platforms with third-party validation
- Developing code of conduct and enforcement mechanisms for market participants
We are committed to the formation of a safe and viable equity crowdfunding market and will continue to update you on our work with the SRO steering committee in the coming weeks and months. Let us know what you want us to tell the SEC and the Steering Committee. We look forward to your input at this pivotal time and stay tuned for updates.