FINRA gives funding portals a narrower rulebook than brokers

The record

FINRA's Funding Portal Rules took effect on 29 January 2016, ahead of Regulation Crowdfunding's own May 2016 effective date, creating a self-regulatory layer for the intermediaries that host Section 4(a)(6) offerings. Rule 100, FINRA's own general-standards provision, defines a funding portal by cross-reference to the SEC's own definition in Regulation Crowdfunding rather than writing a separate one, and states that a registered funding portal is treated as a member for the limited purposes of FINRA's bylaws.

What the sources establish

FINRA's own FAQ on Regulation Crowdfunding states, in its answer to a question about a portal's role, that a funding portal 'may not offer investment advice or recommendations,' and separately that it may not solicit purchases, sales, or offers to buy the securities on its platform. FINRA's funding-portal registration page lists a distinct set of Funding Portal Rules, numbered 100 through 1200, that apply only to funding portals, alongside a separate registration pathway and its own continuing-membership application, apart from the broker-dealer registration and examination system that governs FINRA's other members.

Scope and revision

A funding portal's FINRA membership is real but narrower than a broker-dealer's: it authorizes hosting Section 4(a)(6) offerings under the specific conduct standards in the Funding Portal Rules, and it does not carry the associated-person licensing, suitability, and full sales-practice regime that applies to a registered broker-dealer. Describing a funding portal as a FINRA-registered broker-dealer would blur that distinction; FINRA's own rulebook keeps the two categories, and their rule numbers, separate. The advice and solicitation restrictions FINRA's FAQ describes are the reason a funding portal's role is typically limited to listing an issuer's offering and its own required disclosures, not recommending it.

The decision in front of you

A founder or investor evaluating a crowdfunding platform can check FINRA's own list of the funding portals it regulates and confirm the platform is current in that registration before relying on it. This is an editorial checklist item, not a statement about any specific portal's compliance history.

• Is the platform registered as a funding portal, a broker-dealer, or both, and which FINRA rules apply to it?
• Has the platform's listing of an offering been described anywhere as a recommendation, which its own registration should not permit?
• What compensation structure does the portal disclose, and does it depend on the amount of securities sold?

FINRA's Funding Portal Rules exist because Congress created a category of intermediary narrower than a broker-dealer, and the rule text keeps that boundary explicit.