CrowdEngine’s Compliance Engine™ Explained
Automated Compliance for your Crowdfunding Portal
CrowdEngine developed the Compliance Engine™ to provide issuers the capability of having a white-label crowdfunding portal capable of supporting multiple crowdfunding regulations all on the same platform.
Our Compliance Engine™ can provide a one-stop investment experience for all your investors due to its highly customizable configurations. Portal owners can set up their portal in a way that will fit their specific business needs while remaining SEC & FINRA compliant.
What exactly does this mean?
Because of our Compliance Engine™, portal owners can have different offering types on a single platform. For instance, you can have a Reg D 506(c) deal sitting next to a Reg A+ deal on the same platform.
CrowdEngine can support all national, interstate, and international regulations all at the same time on the same portal. This gives you maximum flexibility for capital raising. Like a superstore, you can provide your investors with maximum selection all in one place.
Why is this Important?
Driving traffic to your crowdfunding portal is paramount to your success. With this in mind, it’s important to note that driving traffic can also be a very time consuming and expensive process.
When a potential investor arrives on your site and finds a multitude of investment opportunities, they are more likely to commit capital. For example, Investor A, a non-accredited investor, is looking to invest in real estate. If your portal only offers Title II-Rule 506(c) deals (for accredited investors), he will move on. However, if you can offer him a real estate deal under the Title III rules (open to non-accredited or retail), he has the option to invest in your project.
Also, if your portal is acting as a marketplace, in other words, you have 3rd party sponsors or developers placing deals on your platform, our Compliance Engine™ allows them to add any deal type to your site.
For example, if Real Estate Developer A wants to raise money with only accredited investors, he can put up a Title II-Rule 506(c) deal. If Real Estate Developer B wants to raise money with the retail crowd, he can add his deal to your portal using a Title III or Reg A+, depending on his funding needs.
Similarly, this is also the case with international deals. A United Kingdom firm can add deals to your portal and be compliant with Financial Conduct Authority (FCA) rules and regulations.
Investor Profile Compliance
The first time an investor logs into the CrowdEngine portal, they register as an individual. Once the investor has a master account as an individual, they can then register as many profiles as they choose – making sure they are appropriate for the investment.
So, once the individual master account is set up, the investor can register as an institutional investor, a custodial investor or entity accounts for other businesses. This obedience to all attributes is what we call the Compliance Engine™. So regardless of the offering type and the profile type, compliance is never compromised.
The different crowdfunding rules can be quite complicated and potentially confusing. CrowdEngine’s Compliance Engine™ does the thinking for you – helping to maximize returns for both you and your clients!
Interested in learning more about our services? Contact us today!