2 of 3 - What are common FINRA Audit questions? (FAQs, Reg-CF, Commonly Asked Questions, FINRA Questions)

Modified on Mon, Jul 1 at 3:46 PM

Below are example questions that can be asked by FINRA representatives during your demo.

Platform Questions:

Question: Can investors see the deals without singing up or creating an account?

Answer: Yes. The Public Landing page is set to a marketplace view that displays the available deals to prospective investors. Investors will need to create an account and log in only when they are ready to make an investment.

Question: How can users agree to the electronic delivery of all communication?

Answer: When signing up for an account, investors will need to consent to electronic delivery. They will see a checkbox with a statement of acknowledgement.

Question: How will Education Materials be sent to new investors?

Answer: Investors will receive a Welcome Email upon account creation. Links to the Education Materials are included in the text of this email.

Question: How is the “Notice of Invested Commitment” sent to investors?

Answer: An email is generated as soon as an investor creates a transaction in the platform (even though the transaction is still in Pending status). This email contains information about the investor and the campaign, as well as the Notice of Invested Commitment.

Question: Are investors informed that they have 48 hours to cancel their investment after the end of the campaign?

Answer: Yes, the email sent when a transaction is created includes this policy information.

Question: Where are the communication pages/channels within the platform?

Answer: Each offer has a Q & A section added where investors can ask questions or communicate with the issuers anonymously while logged in to the platform. Only Platform Admins or Issuers are able to answer questions, and their affiliation with the offer will be identified within their post.

Question: How is an investor’s income verified and how are their qualifications/crowdfunding limits calculated?

Answer: Investors will be prompted to complete a series of questions about their recent investment activity. They will also be able to upload documents for verification.

Question: How do investors review Promoters' Compensation Disclosure?

Answer: Prior to creating a new transaction, investors are required to acknowledge all disclosures in the platform.

Question: If an investor indicates that they are accredited, how can they provide evidence of their status?

Answer: The investor will be able to upload accreditation documents directly to the platform.

Question: What are your criteria for approving transactions?

Answer: Typically, any red flags about the investor will be raised on the KYC and AML checks that are run when the investor creates their account. If the checks are clear, transactions are considered approved. Transactions are only completed to collect funds from investors once the campaign has ended and the goal is met.

NOTE: Manual transaction approval is required only when it is included in the Investor Flow. If you have specific criteria for manually approving transactions, it may be helpful to share that.

Question: Have you disclosed any fees you plan to charge?

Answer: Information on fee collection has been added to the footer in the platform, and any fees that are charged to the investor are displayed in a table at the time of confirming their transaction.

NOTE: We have a sample addition to the standard Platform Disclaimer here: The Site is compensated through investor transaction fees and success fees from issuing companies. We receive transaction fees from investors, and we receive percentage fees of gross proceeds of offerings from issuing companies, and a further percentage fees of gross proceeds of offerings in the form of equivalent offered securities.

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