Specialised Solutions for Crowdfunding Platforms’ Compliance Management

We offer a comprehensive set of risk and compliance solutions tailored to a variety of crowdfunding platforms’ compliance obligations. We can help you comply with crowdfunding regulations in a commercially oriented and goal-focused manner, providing a tailored approach to crowdfunding platforms’ compliance management with regard to your specific circumstances, including:

• Your commercial objectives
• Your crowdfunding solutions
• Your business size
• Your technology and human resources
• Your risk appetite
• Your governance structure
• Your client demographics
• Your countries of operation, their applicable laws, and relevant crowdfunding platforms’ licensing requirements and regulations, including key aspects such as outsourced providers' monitoring, compliance training, risk management, audit, and assurance.
• Any related compliance obligations, including, but not limited to, crowdfunding platforms’ obligations under privacy laws, anti-money laundering and counter-terrorist financing (AML/CFT) laws, fair trading laws, and more.
• Crowdfunding platforms’ compliance assurance obligations, including internal control design and testing, implementation of compliance calendars, management plans, compliance assurance programs and other second and third-line compliance requirements.
• Specific operational compliance requirements for crowdfunding platforms, including but not limited to:
  • Client due diligence and onboarding
  • Surveillance and monitoring
  • Recordkeeping
  • Conflict of interest management
  • Regulatory technology (RegTech) integration
  • Internal reporting
  • External reporting
  • Transaction execution
  • Regulatory Filings

 

 

What Jurisdictions Do Our Compliance Solutions Cover?

Our compliance solutions extend across major financial markets and cover crowdfunding platforms’ regulation and crowdfunding platforms’ licensing requirements in the following jurisdictions:

• Australia: Where the Australian Securities and Investments Commission (ASIC) regulates crowdfunding platforms under the Corporations Act 2001.
• United States: Where the Securities and Exchange Commission (SEC) regulates crowdfunding platforms under the Jumpstart Our Business Startups (JOBS) Act, specifically through "Regulation Crowdfunding".
• United Kingdom: Where the Financial Conduct Authority (FCA) oversees crowdfunding platforms, requiring adherence to the Financial Services and Markets Act 2000.
• Singapore: Where the Monetary Authority of Singapore (MAS) governs crowdfunding platforms under the Securities and Futures Act 2001.
• New Zealand: Where the Financial Markets Authority (FMA) oversees licensed crowdfunding platforms pursuant to the Financial Markets Conduct Act 2013.
• European Union: Where crowdfunding platforms in the EU should navigate the European Crowdfunding Service Providers Regulation (ECSPR).

 

Low Tax Jurisdictions 

• Cayman Islands: Where the Cayman Islands Monetary Authority (CIMA) may regulate crowdfunding platforms under the Securities Investment Business Act (2020 Revision), depending on the structure of the offering.
• Bermuda: Where the Bermuda Monetary Authority (BMA) may oversee crowdfunding platforms under the Investment Business Act 2003 if the platform involves regulated investment activity.
• British Virgin Islands: Where the British Virgin Islands Financial Services Commission (BVI FSC) may grant licences to crowdfunding platforms under the Securities and Investment Business Act (Revised 2020), depending on the services provided.
• Malta: Where the Malta Financial Services Authority (MFSA) regulates crowdfunding platforms, providing a comprehensive and supportive regulatory framework under the Crowdfunding Rules.
• Isle of Man: Where the Isle of Man Financial Services Authority (IOMFSA) may regulate crowdfunding platforms under the Financial Services Act 2008, depending on the platform’s structure and whether it triggers regulated activity.
• Vanuatu: Where the Vanuatu Financial Services Commission (VFSC) may regulate crowdfunding platforms under the Financial Dealers Licensing Act (CAP 70) if the activities fall within existing investment or securities frameworks.
• Seychelles: Where the Seychelles Financial Services Authority (FSA) may regulate crowdfunding platforms under the Securities Act, 2007, if they engage in regulated securities business.

 

What types of Crowdfunding Businesses Do We Support?

Our crowdfunding services' compliance solutions cover the following types of crowdfunding platforms and regulatory crowdfunding offerings:

• Equity Crowdfunding Platforms: These platforms enable the sale of securities in start-ups or private companies to multiple investors. They should generally comply with securities regulations and ensure investor protection.
• Lending-Based Crowdfunding Platforms: These platforms connect borrowers directly with individual lenders. They should generally comply with lending regulations and ensure that both borrowers and lenders meet legal requirements.
• Rewards-Based Crowdfunding Platforms: These platforms offer non-monetary rewards for project contributions. Rewards-based platforms often don’t fall under strict financial regulations but should ensure that they clearly communicate reward terms and fulfil obligations to contributors, which is more about consumer protection than regulation.
• Donation-Based Crowdfunding Platforms: These platforms facilitate donations for charitable or community projects without financial return to donors. They should generally comply with charitable solicitation laws and ensure transparency in fund usage.
• Real Estate Crowdfunding Platforms: These platforms allow investors to contribute to real estate projects and earn returns based on property performance. They should generally comply with real estate investment and securities regulations.
• Debt Crowdfunding Platforms: These platforms facilitate the issuance of debt instruments, such as bonds or debentures, to multiple investors. They should generally comply with securities laws and provide transparent information about debt offerings.
• Royalty-Based Crowdfunding Platforms: These platforms enable investors to earn a percentage of revenue from funded projects. They should generally comply by ensuring clear agreements on royalty payments and adhering to securities regulations.
• Hybrid Crowdfunding Platforms: These platforms combine models, such as equity and rewards-based crowdfunding, to offer diversified funding options. They should generally comply with regulations applicable to each model involved.
• Community-Based Crowdfunding Platforms: These platforms focus on funding projects that benefit specific communities. They should generally comply by ensuring transparency and accountability in the use of funds.
• Microfinance Crowdfunding Platforms: These platforms provide small loans to entrepreneurs in developing countries. They may have to comply with microfinance regulations and ensure fair lending practices.
• P2P Insurance Crowdfunding Platforms: These platforms facilitate peer-to-peer insurance funding, where individuals pool resources to insure against specific risks. They should generally comply with insurance regulations and ensure transparent management of pooled funds.
• Broker-Dealer or Funding Portals: These platforms operate under broker-dealer or funding portal guidelines. They should generally comply with securities regulations and oversight by bodies such as the SEC or FINRA.

 

Crowdfunding Platforms’ Compliance Advisory

Our focus areas include:

• Detailed Compliance Advice: Covering crowdfunding platforms’ compliance management issues across the first, second, and third lines, as well as matters related to effective compliance with financial markets regulations and crowdfunding platforms’ licensing requirements.
• Banking Relationships Advice: On risk and compliance issues related to managing and expanding relationships with banks, liquidity providers, and other financial institutions to help you meet their risk appetite requirements, anti-money laundering and counter-terrorist financing requirements, fraud prevention and recall volume expectations, and other compliance-related and operational standards.
• Operational AML Advice: Advising support, onboarding, KYC, operating and other teams on the day-to-day onboarding and support queue management, effective AML/CFT resource allocations, and operational improvements, helping you maintain the overall customer experience and efficiency while remaining compliant with crowdfunding platforms’ AML/CFT requirements.
• Operational Compliance Advice: Advising compliance, management, technology, and support teams on the day-to-day compliance with crowdfunding regulations, focusing on internal processes and critical internal controls for effective crowdfunding platforms’ compliance management.
• Risk Management Advice: Covering risk rating and methodologies, risk assessments, management, and mitigation for various risk types faced by crowdfunding platforms, including regulatory, ML/TF, fraud, data protection, and operational risks. We help you safeguard against potential compliance breaches and comply with risk management obligations under crowdfunding platforms’ licensing requirements and other applicable laws and regulations.
• Compliance Framework Advice: To help you create or enhance your compliance management framework, identify gaps and areas of improvement, meet the crowdfunding platforms’ compliance obligations effectively, improve internal governance and reporting, and optimise them for market expansion and growth.
• Crowdfunding Platforms’ Licensing Advice: We can guide you through the licensing process, help you apply regulations to your specific circumstances and business environment, and meet crowdfunding platforms’ licensing requirements to become licensed or maintain it.
• Peer Benchmarking and Best Practices: We can help you benchmark your compliance practices against peers and applicable regulatory compliance guidance, identify areas for improvement and adopt best practices for enhanced compliance.
• Government Agencies Liaison Advice: We provide strategic guidance to senior management and compliance teams on maintaining and managing relationships with external bodies, including regulators, AML/CTF supervisors and law enforcement agencies, focusing on long-term compliance strategies and proactive engagement.
• Specific Crowdfunding Platforms’ Compliance Issues: We can help you resolve specific risk or compliance issues related to crowdfunding regulations and compliance obligations, including but not limited to external audits and reviews, reporting, oversight, difficult clients or transactions, expansion challenges, compliance management issues, process optimisation, regulatory challenges you may encounter and more.
• Further information: You can visit our Regulatory Compliance Consulting Solutions page for a comprehensive list of advisory services we offer to crowdfunding platforms and other licensed financial institutions, financial services providers, and regulated businesses.

 

 

Reporting and Regulatory Liaison Solutions for Crowdfunding Platforms’ Compliance

• Regulator Liaison Management: Providing operational guidance to senior management and compliance teams on managing relationships with regulators, AML/CFT supervisors, police bodies, privacy commissioners, and other government entities. This includes handling requests for information, responding to ad-hoc regulatory inquiries, managing findings from audits and investigations, managing compliance with reporting obligations for crowdfunding platforms and more.
• Board and Committee Reporting: Facilitating structured reporting workflows for various committees and board delegates, including risk, compliance, and audit committees, focusing on your current compliance status, deviations from your risk appetite, changes in risk ratings and any operational compliance updates to ensure that governance structures are well-informed and aligned with compliance management practices.
• Compliance Performance Metrics: Developing and presenting comprehensive compliance performance metrics to the board or relevant committees, offering insights into your compliance effectiveness and identifying points for improvement in key compliance areas, including compliance training, fraud prevention, compliance monitoring, risk rating and assessment, controls effectiveness, adherence to your compliance calendar, regulatory technology (RegTech) performance, and more.
• Internal Audit Reporting: We can help you increase the effectiveness of the internal audit to make its findings reflect your actual performance against the crowdfunding platforms’ compliance obligations. This includes developing tailored methodologies for the auditors, preparing the necessary audit evidence and reviewing audit results. The goal is to ensure that audit procedures and outcomes directly contribute to maintaining and enhancing your compliance status and internal controls' effectiveness.
• AML/CFT Reporting Compliance:  We help with the implementation of effective AML/CFT reporting processes, aligning with specific anti-money laundering regulations for internal oversight and prompt escalation of critical AML issues within your business to help the management receive a clear overview of your AML/CFT compliance status.
• Transactional Reporting: Implementing effective transactional reporting procedures to help with crowdfunding platforms’ compliance management of reporting obligations under various laws and regulations, including submitting SAR, SMR, STR, PTR, TTR, specific reportable matters under the crowdfunding platforms’ licensing requirements and other externally reportable transactions and activities.
• Internal Quality Assurance Reporting: While second-line control testing is crucial for complying with crowdfunding regulations, including crowdfunding platforms’ licensing requirements, first-line quality assurance results are equally important for effective risk and compliance management. We help organise effective reporting lines, tailor reporting content to your specific circumstances, products, and team size, and establish a structured approach to responding to reporting outcomes.

 

 

Comprehensive Compliance Management Solution for Crowdfunding Platforms

Our compliance management services include, but are not limited to, the following:

• Crowdfunding Platforms’ Compliance Management Leadership: We act as your Compliance Leads and Compliance Managers, fully managing compliance obligations under the applicable crowdfunding platforms' licensing requirements, laws, regulations, industry codes, and regulatory guidance.
• Second-Line Compliance Management: We offer a full range of second-line compliance assurance solutions, including internal controls testing for operational, compliance, marketing, legal and other risks, as well as managing issue closure control testing and more.
• Supporting the Board in Strategic Compliance Management: Advising on the necessary compliance resourcing, budget, tools, role structuring, and compliance functions' structure to support your specific business objectives within your risk appetite and risk management framework.
• Compliance Project Management: Effectively coordinating between senior management, committees, legal advisers, risk and compliance functions, outsourced providers, and different departments, including product development, technology, customer support, operations, assurance, marketing, and others, to help you successfully implement compliance projects across the business.
• Customised Governance Solutions: Tailoring governance frameworks and mechanisms to fit your specific governance structure and effectively comply with crowdfunding regulations and other applicable obligations. Whether your business is locally oriented, a start-up, undergoing expansion, part of a multinational group, has a listed parent company or is undergoing restructuring, we tailor the oversight of crowdfunding platforms’ compliance management to your business case.
• Stakeholder Management & Reporting: Reporting to the board, committees, shareholders, regulators and other stakeholders. Providing management and the board with comprehensive compliance reports that cover your compliance with crowdfunding platforms’ compliance obligations, regulatory development summary, compliance-related data and statistics, internal controls testing outcomes and more. Also covering the status of your specific compliance-related projects and compliance goals, relevant compliance KPIs, and more.
• Compliance Calendar Implementation: We design and implement compliance management programs and calendars, covering such areas of crowdfunding platforms’ compliance obligations as policy and key document reviews, control testing, risk assessment and reviews, vendor reviewers, user system access reviews, assurance activities and more.
• Managing Customer Onboarding and Due Diligence: Implementing commercially oriented and compliant processes for KYC information collecting, Know Your Business (KYB), ML/TF risk assessment, PEP and Sanctions screening, CDD & EDD, especially for higher ML/TF risk clients, to help you comply with AML/CFT compliance obligations for crowdfunding platforms.
• AML Transaction Monitoring and Reporting: Developing and implementing a set of business-specific ML/TF alerts and red flags to detect and report suspicious transactions to comply with the crowdfunding platforms’ AML requirements without making AML/CFT compliance a hindrance to business.
• Information Requests and AML/KYC Data Sharing: Handling information requests from law enforcement agencies, AML/CTF supervisors, and other relevant AML/CTF designated entities, such as your banking partners and other essential service providers (liquidity providers, finance providers, etc.), ensuring that you are fully supported in all AML/CTF compliance-related communications.
• Business Expansion Support: Providing support for your business expansion objectives, recognising and assessing new risks, developing and implementing controls and mitigations for them, as well as addressing new compliance obligations and putting in place practical tools and systems to manage them.
• Crowdfunding Platforms’ Operational Compliance: Including but not limited to:
  • On-the-Ground Compliance: Conducting compliance management meetings, organising routine and ad hoc compliance reporting, overseeing mitigations and controls testing, leading adjustments and enhancements to your internal controls and protocols when required.
  • Compliance Process and Operations Building: Developing effective and compliant procedures and processes to implement your policies, support your operations across different teams and mitigate operational, regulatory and other risks.
  • Outsourced Provider Performance Monitoring: Setting up initial due diligence and ongoing review frameworks for your outsourced providers to help you meet the required service standards for outsourcing under various crowdfunding platforms’ compliance obligations, including crowdfunding platforms’ licensing requirements.
  • Incident Management and Reporting: We can help you set up effective processes for incident reporting, escalations, and management at different levels of your business.

 

 

Crowdfunding Platforms’ Compliance Assurance 

Our services include:

• Compliance Assurance Programs:  We can design and implement your compliance assurance program to maintain enhanced oversight of your compliance with both crowdfunding regulations and your internal compliance and risk appetite thresholds.
• Organisation-Wide Risk Assessments: Helping you focus on the specific risks faced by your business, considering its size, products, client types, jurisdictions of operation, delivery channels, financial institutions you interact with, available technology, and other tools. This includes assessing available mitigations, controls, their effectiveness, residual risk ratings, and the plan to move forward.
• Internal Controls Design: We can develop internal controls for various risk types, including regulatory, fraud, operational, strategic, financial, and other risks. Please visit our Internal Controls Design page for more information. 
• Assurance Testing: We conduct assurance testing to verify that the business complies with its policies, procedures, and crowdfunding platforms’ compliance obligations, including crowdfunding platforms' licensing requirements. We also assess whether your internal controls effectively mitigate existing risks, including those required to be monitored under the applicable crowdfunding regulations. This process includes a compliance controls testing report and, if necessary, a gap analysis.
• Compliance Quality Assurance: We go beyond merely meeting regulatory requirements. We focus on evaluating and enhancing your risk and compliance management processes to ensure they align with your current and future goals, business model, your risk analysis, your current client inflow, and more. We also suggest which compliance processes you can use to meet your goals. Here is an example of this service in the AML/CFT area.
• Assurance Reporting: Compiling testing findings and issuing comprehensive compliance assurance reports, which include:

• Identification of any deficiencies or control weaknesses, with clear explanations and potential root cause analysis.
• Recommendations for corrective actions to address identified issues and enhance compliance effectiveness.
• Evaluation of the overall effectiveness of your internal controls and regulatory compliance monitoring program against your desired assurance level.

• Regulatory Inspection Readiness: We can help your business prepare for external audits and regulatory inspections, reducing the risk of adverse findings related to crowdfunding platforms’ compliance obligations. This includes conducting mock inspections to identify gaps, reviewing documentation and record-keeping practices to ensure all relevant materials are well-organised and readily accessible, and training staff on their roles in the inspection process. We assist in identifying any missing information and weak points, provide interview preparation, and more to ensure readiness for auditor or regulator review.
• Further information: You can visit our Compliance Assurance Solutions page for more information on our third-line compliance assurance review solutions.

 

Compliance Remediation Solutions

Our focus areas include:

• Compliance Remediation Advice: Assisting crowdfunding platforms in effectively addressing and rectifying compliance issues, from minor breaches to significant regulatory challenges, including warnings and action plans.
• Remediation Plan Development: Following the independent review, we assist in analysing the findings to identify necessary remedial actions. We then support crowdfunding platforms in devising a detailed plan outlining these actions for submission to your regulator or an AML/CFT supervisor, ensuring the plan is both actionable and compliant with regulatory expectations.
• Remediation Plan Commitment: We help crowdfunding platforms complete their remediation plans and prevent non-compliance recurrence.
• Executive Attestation Support: Our services include assisting senior executives in preparing the required attestations to your regulator. This involves confirming that all necessary remedial actions have been undertaken and adequate compliance measures are in place, supported by comprehensive documentation and evidence. This option covers assistance with the removal of any licensing restrictions.
• Further Information: For more information, you can visit our Compliance Remediation Solutions page.

 

 

Internal Controls Testing and Crowdfunding Platforms’ Compliance Management

When it comes to reality versus a nice policy or procedure with nothing else to show for it, it’s often a case where a policy says A, but reality says B. One might ask, why didn’t we test our internal controls before? Or, why didn’t we do it properly? There’s nothing worse than faking compliance instead of actually doing it.

Our second line of compliance defence solutions covers the development, testing, and enhancement of a wide range of controls to ensure compliance with various laws and regulations governing crowdfunding platforms' compliance obligations.

We go beyond merely quoting crowdfunding regulations or a selection of licensing requirements, then adding Excel sheets painted in different colours as a supposed source of truth with nothing to show for it.

• We test them.
• We link them to your risk appetite and core risk management documentation.
• We provide relevant suggestions and analysis tailored to your business.

Some of our focus areas for testing internal controls include:

 

Regulatory Compliance & Licensing Controls

• Compliance Management: Crowdfunding platforms are expected to have robust systems for ensuring compliance management, including conflict of interest management.
• Liquidity Management:  Crowdfunding businesses should ensure adequate liquidity to meet financial obligations promptly. Licensed crowdfunding platforms are expected to adhere to comprehensive risk management standards covering various risk types, ensuring robust risk frameworks are in place.
• Capital Adequacy: To absorb potential losses, crowdfunding platforms should maintain a certain level of tangible financial resources, including net assets or net tangible assets (NTA).
• Financial Auditing: Licensed crowdfunding platforms should engage qualified auditors to conduct regular financial audits to verify the accuracy of financial statements and regulatory compliance.
• Restrictions on Use of Funds: Donation-based crowdfunding operators are expected to comply with specific regulations to ensure donations are used for the intended purpose.
• Annual Fundraising Cap:  Crowdfunding businesses are expected to enforce fundraising limits as required by local regulations, particularly for equity crowdfunding offerings.
• Investment Limits: Crowdfunding platforms are expected to cap the amount individual non-accredited investors can contribute across all crowdfunding offerings in a 12-month period, particularly for equity crowdfunding.
• Cross-Border Application of Regulations:  Crowdfunding companies are expected to comply with specific guidelines and rules regulating the cross-border application of national crowdfunding licensing requirements when facilitating fundraising from retail clients in other jurisdictions.
• Digital Payment Token Services: crowdfunding service providers dealing with digital payment tokens should comply with regulations set out by regulators for cryptocurrencies and digital assets, which may not be fully covered under traditional crowdfunding regulations.
• Restrictions on Nominee Company Offering: Crowdfunding companies are expected to ensure that nominee companies are not used to circumvent legislative restrictions, thereby maintaining the integrity of offers and the transparency of investment structures on the crowdfunding platform

 

Operational Oversight Controls

• Outsourcing Oversight: Crowdfunding companies are expected to maintain control and oversight over outsourced functions to ensure they do not compromise regulatory obligations or client protection.
• Risk Management: Crowdfunding service providers should implement comprehensive risk frameworks to identify, assess, and manage operational and market risks. This includes ensuring that risk management practices are robust and align with the specific needs of the crowdfunding platform.
• Governance Arrangements: Crowdfunding businesses are expected to establish effective governance structures to oversee operations and ensure responsible management and decision-making.
• Senior Management Accountability: Crowdfunding platforms should assign specific responsibilities to senior management to ensure accountability for conduct and competence within the organisation.
• Operational Resilience: Crowdfunding companies are expected to ensure the resilience of critical business services, with plans to maintain continuity in the face of disruptions, particularly for lending-based platforms where continuity in managing loan repayments during disruptions is essential.
• Technology Risk Management: Crowdfunding service providers should adhere to technology risk management controls required by regulators, particularly those engaged in electronic trading or reliant on sophisticated IT systems. This includes robust cybersecurity measures and ensuring system reliability.

Market Integrity & Transparency Controls

• Market Conduct Standards: Crowdfunding Platforms are expected to ensure that market conduct is fair, transparent, and free from abuse, including manipulation or insider trading.
• Fair Dealing Principles: Crowdfunding companies should adhere to principles that ensure the fair treatment of clients, with clear communication and transparent dealings.
• Conduct and Disclosure Standards: Crowdfunding service providers are expected to maintain high standards of conduct and ensure that disclosures to their clients are clear, accurate, and effective.
• Client Asset Protection: Crowdfunding businesses should safeguard client assets by segregating them from the service operator's own funds, with clear rules for their use and handling.
• Dispute Resolution: Crowdfunding platforms are expected to establish proper mechanisms for resolving client disputes and ensuring proper compensation, especially for retail clients.
• Informed Investor Consent: Crowdfunding service providers should implement robust measures to guarantee that investors are informed about the risks involved. This includes providing prominent warning statements, risk disclosure requirements, and obtaining explicit investor confirmations before service usage to ensure they can make informed investment decisions.
• Crowdfunding Advertising Controls: Crowdfunding businesses should adhere to compliance rules focusing on preventing misleading promotions and ensuring that advertising is clear, fair, and not misleading.
• Conflict of Interest Controls: Crowdfunding service providers should have guidelines in place for handling conflicts of interest, particularly in equity crowdfunding, to maintain fairness and transparency.
• Disclosure Requirements: Crowdfunding companies should ensure that all legally mandated disclosures, such as financial performance, risk factors, and the use of funds, are provided to investors to maintain transparency and trust.

Resource Management Controls

• Resource Adequacy: Crowdfunding platforms should maintain adequate financial, technological, and human resources to operate effectively and comply with regulations, including:
  • Financial Resources: Sufficient capital to cover operational costs, manage risks, and maintain solvency.
  • Technological Resources: Robust IT infrastructure to handle platform functions, secure user data, and ensure system reliability.
  • Human Resources: A qualified team with expertise in crowdfunding operations, risk management, compliance, and potentially financial services (depending on the crowdfunding type).
• Professional Competence: Crowdfunding platforms should ensure key personnel possess the necessary competence, knowledge, and skills to fulfil their roles effectively, including:
  • Understanding of relevant crowdfunding regulations and licensing requirements.
  • Expertise in risk management and mitigation strategies specific to crowdfunding.
  • Knowledge of financial markets and products (especially for lending and equity-based crowdfunding).
  • Strong communication and customer service skills.
• Advisor and Representative Competence (For Platforms Offering Financial Advice): Crowdfunding Service Providers offering financial advice should ensure that their advisors and representatives are adequately trained and competent. This might involve specific qualifications and ongoing professional development requirements depending on the jurisdiction.

 

Reporting Controls

• Comprehensive Transaction Reporting: Crowdfunding Businesses are expected to maintain detailed reporting of financial instrument transactions for market abuse monitoring and regulatory oversight.
• Regulatory Reporting: Crowdfunding platforms should conduct regular reporting to the relevant authority, detailing financial status, trading activities, compliance status, and more.
• Record-Keeping: Crowdfunding service providers should maintain accurate records of all business transactions and financial matters for transparency and accountability under a range of laws applicable to crowdfunding platforms, including AML/CFT, tax, financial marketing laws, and financial licensing requirements.

 

Product and Service Management Controls

• Product Suitability: Crowdfunding platforms are expected to ensure that investment opportunities are appropriate for investors' risk tolerance and financial situation. This might involve investor accreditation requirements or risk profiling tools for non-accredited investors.
• Product Governance: Crowdfunding companies should implement controls for campaign placement, approval, and review to ensure they meet regulatory requirements and client needs. This includes procedures for campaign review, approval, and ongoing monitoring.
• Initial Due Diligence: Crowdfunding service providers should have procedures for reviewing campaigns before launch, including checks for completeness, accuracy of information, and compliance with regulations. Enhanced due diligence on project owners may be required to maintain market integrity.
• Ongoing Due Diligence of Campaigns: Crowdfunding businesses should continuously monitor active campaigns for any changes or deviations from initial disclosures.
• Marketing and Communication Controls: Crowdfunding platforms should have controls in place to ensure that marketing materials are clear, fair, and not misleading for investors.
• Campaign Suitability Assessment: Crowdfunding service providers should evaluate the suitability of campaigns for their investor base, considering risk profiles and investor interests.
• Campaign Lifecycle Management: Crowdfunding companies should implement oversight from campaign initiation to conclusion, ensuring compliance and transparency at each stage.
• Investor-Campaign Matching: Crowdfunding platforms are expected to have mechanisms to match campaigns with the right investor groups based on investment preferences and risk tolerance.
• Transparent Campaign Information: Crowdfunding service providers should ensure all campaign information is clear, accurate, and accessible, allowing informed decision-making by potential backers.
• Data Protection and Privacy Controls: Crowdfunding platforms should adhere strictly to data protection regulations, safeguarding investor and campaign organiser information.
• Feedback and Complaints Handling: Crowdfunding businesses should establish processes for addressing investor feedback and resolving disputes efficiently.

 

Campaign Transparency and Reporting

• Campaign Milestone Reporting: Crowdfunding businesses should require campaign organisers to provide regular, detailed updates on project milestones and progress.
• Use of Funds Reporting: Crowdfunding platforms should enforce transparent disclosure from campaign organisers on how the raised funds are being utilised.
• Investor Communication: Crowdfunding businesses need to facilitate and ensure continuous communication between campaign organisers and their backers.
• Risk Disclosure: Crowdfunding platforms should mandate campaign organisers to regularly update their backers on any potential risks or changes in the project's scope.
• Financial Disclosure: While not requiring full audit reports, crowdfunding platforms should ensure campaign organisers provide backers with clear financial overviews, particularly for equity and lending-based crowdfunding.

 

Crowdfunding Transactional Controls

• Ensuring Funds Segregation: Crowdfunding platforms should ensure that funds from backers are kept separate from the platform's operational funds.
• Investment Caps: Crowdfunding service providers should implement limits on investment amounts per campaign to manage risk exposure for investors.
• Payment Security: Crowdfunding companies should utilise secure payment gateways to protect transaction integrity.
• Real-time Monitoring: Crowdfunding businesses are expected to continuously monitor crowdfunding transactions for unusual activity to prevent market abuse and ensure compliance with AML/CTF and other regulatory standards.

 

Licensing Solutions for Crowdfunding Platforms

 

• Financial Licensing Support: We provide comprehensive support for a wide range of crowdfunding platform licensing applications, including:

• Australian Financial Services Licence (AFSL) for Crowdfunding Platforms in Australia: We guide you through every step of the AFSL application process, ensuring compliance with ASIC's regulations under the Corporations Act 2001.  Visit our ASFL Solutions for Crowdfunding Platforms page for more information about crowdfunding regulations in Australia.
• Crowdfunding Platform Licence in New Zealand under the Financial Markets Conduct Act 2013 (FMCA): We assist with navigating the application process and meeting the FMA's licensing criteria as outlined in the FMCA. Visit our FMA Crowdfunding Licence Solution page for more information about crowdfunding platforms' licensing requirements in New Zealand.
• UK Financial Conduct Authority's (FCA) Permissions for Crowdfunding Activities in the UK: We support obtaining the necessary permissions for your crowdfunding activities under the Financial Services and Markets Act 2000 (FSMA). Visit our FCA Authorisation page for Crowd-sourcing Providers for more information about crowdfunding regulations in the UK.
• SEC Registration for Crowdfunding Platforms in the United States: We assist you in navigating the SEC registration process and meeting its regulatory requirements under the JOBS Act.
• Capital Markets Services Licence for Crowdfunding Platforms in Singapore: We facilitate the application process for your crowdfunding platform licence in Singapore, supporting compliance with the Monetary Authority of Singapore's (MAS) regulations under the Securities and Futures Act. Visit our Capital Markets Services Licence page, for more information about crowdfunding platforms' licensing requirements in Singapore.
• Cayman Islands Monetary Authority (CIMA) Crowdfunding Platform Licence: We provide guidance for obtaining a crowdfunding platform licence in the Cayman Islands, navigating CIMA's regulatory requirements and ensuring adherence to the Securities Investment Business Law (SIBL).
• Bermuda Monetary Authority (BMA) Crowdfunding Platform Registration: We assist with navigating the Bermuda regulatory environment for crowdfunding platforms, including the entire registration process under the Bermuda Monetary Authority, ensuring compliance with the Investment Business Act and alignment with BMA's standards for financial market participants.
• British Virgin Islands Financial Services Commission (BVI FSC) Crowdfunding Platform Licence: We provide support for securing a crowdfunding platform licence in the BVI, guiding you through meeting the requirements set by the BVI Financial Services Commission under the Securities and Investment Business Act (SIBA) and related regulations, ensuring compliance with BVI laws and regulatory standards.
• Malta Financial Services Authority (MFSA) Crowdfunding Platform Licence: We assist with obtaining a crowdfunding platform licence in Malta, guiding you through every step of the process and ensuring compliance with the MFSA's regulatory framework and guidelines.
• Isle of Man Financial Services Authority (IOMFSA) Crowdfunding Platform Licence: We provide guidance for obtaining a crowdfunding platform licence in the Isle of Man, navigating the regulatory requirements under the Financial Services Act 2008 and ensuring compliance with IOMFSA standards.
• Vanuatu Financial Services Commission (VFSC) Crowdfunding Platform Licence: We support the application process for a crowdfunding platform licence in Vanuatu, ensuring compliance with the VFSC's regulatory requirements and leveraging the flexible and cost-effective licensing regime.
• Seychelles Financial Services Authority (FSA) Crowdfunding Platform Licence: We assist with obtaining a crowdfunding platform licence in Seychelles, guiding you through the regulatory requirements under the Securities Act 2007 and ensuring compliance with FSA standards.

• International Governance Alignment: We provide strategic advice on aligning governance models for crowdfunding platforms and services operating across multiple jurisdictions to meet diverse regulatory expectations while maintaining operational efficiency and regulatory compliance.
• Further information: For more information, please visit our Crowdfunding Licensing page.

 

 

Policies and Procedures for Crowdfunding Platforms’ Compliance Management

• Compliance Policies and Core Documents: We develop, enhance, and implement a set of core policies, manuals, frameworks, and procedures for effective crowdfunding compliance management.
• Effective Procedures for Crowdfunding Platforms' Compliance Management: We draft and enhance a detailed set of procedures and protocols to meet the distinct needs of your business, focusing on efficient compliance, your business goals, and applicable crowdfunding compliance requirements.
• Examples: These policies and procedures include, but are not limited to:

 

Operational Compliance

• Compliance Management Frameworks
• Compliance Monitoring Programs
• Compliance Calendars & Checklists
• Complaints Handling and Dispute Resolution Policies
• Compliance Training Manuals and Programs, as part of our regulatory compliance training solutions
• Obligation Registers
• Margin Account Negative Balance Write-Off Procedures
• Incident Reporting Policies & Procedures
• Outsourcing Policies and Vendor Risk Management policies as part of our outsourced provider's compliance management solutions
• New Client Account Opening Policies & Procedures, as part of our customer onboarding solutions
• Restrictions on Use of Funds Policies
• Annual Fundraising Cap Policies
• Investment Limits Policies
• Crowdfunding Advertising Controls Policies

 

Governance and Oversight

• Board Charters, Risk, Audit and Compliance Committee Charters, as part of our corporate governance solutions
• Codes of Conduct
• Delegations Registers
• HR Manuals & Policies
• Conflict of Interest Policies

 

Risk Management

• Risk Management Frameworks as part of our risk management solutions
• Risk Assessment Guidelines and Methodologies
• Internal Control Testing Methodologies
• Risk Registers and specialised risk registers like Health and Safety Risk Registers
• Deposit Interest Rate Policy & Procedures
• Informed Investor Consent Policies

 

Audit and Assurance

• Compliance Assurance Programs as part of our compliance assurance solutions
• Internal Audit Policies and Programs as part of our internal control testing solutions
• Regulatory Reporting Procedures

 

Client and Market Conduct

• Marketing & Advertising Policies
• Fair Lending Policies

 

AML/CFT & Financial Crime Compliance

• AML/CFT Compliance Programs
• AML/CFT Risk Assessment
• Whistleblowing Policies
• Sanctions Compliance policies and procedures
• Fraud Prevention Protocols and Controls as part of our fraud prevention solutions
• ABC Policies

 

Privacy and Data Management

• Client Data Protection Policies
• Record-keeping Policies & Procedures and/or Data Governance Policies as part of our record-keeping compliance solution
• External Privacy Policies
• Internal Data Protection Compliance Programs

 

 

Compliance Training and Capacity Building

We focus on practical compliance, and the application of training to real-world compliance scenarios and challenges that are crowdfunding businesses and platforms generally face. Our services include:

• Customised Compliance Training Solutions:  Specialised compliance training sessions for various teams, including management, compliance, operations, sales, and customer relations, focusing on crowdfunding regulations, applying crowdfunding platforms’ compliance management practices to your circumstances, risk awareness, and more.
• Up-to-date Regulatory Compliance Updates:  Keeping compliance officers, managers, CROs, COOs, and other Risk and Compliance team members informed of changes in crowdfunding platforms’ licensing requirements and regulations, AML/CFT updates, and changes in regulatory guidance.
• Data Analysis for Effective Compliance Monitoring: Covering training on compliance-related, data-based analysis and its results, including risk rating, internal control adjustments, resource and focus reallocation, and more.
• Workshops on Emerging AML Trends and Red Flags: Updating on the new AML trends, red flags, typologies, and AML/CFT requirements for crowdfunding platforms. For more information, please visit our AML/CFT Training Solutions page.
• Practical Workshops: Interactive workshops focused on effective and goal-oriented crowdfunding platforms’ compliance, capacity planning, and resource allocation, covering:

• Crowdfunding platforms’ regulations
• Internal and external compliance reporting
• Effective governance over risk and compliance functions
• Organisation-wide risk assessment, risk rating methodologies and the development, management, and testing of corresponding internal controls, including controls testing methodologies and practical techniques.
• Crowdfunding platforms’ compliance reality, including outsourced provider monitoring, UAV management, incident management, product suitability assessments, advertising and marketing compliance, improvements in the client onboarding journey, transaction monitoring processes, and more.

• Further information: You can visit our Compliance Training Solutions page for more information on the compliance training services we offer to licensed financial institutions and financial service providers.

 

Crowdfunding Platforms and AML/CTF Obligations

We offer a complete set of solutions covering crowdfunding platforms’ anti-money laundering (AML), financial crime and counter-terrorism financing (CTF) compliance. Our solutions include:

• Customer due diligence, screening, and customer onboarding solutions
• Development of transaction monitoring frameworks tailored to crowdfunding platforms’ specific ML/TF red flags and your business specifications
• AML advisory covering financial advice providers' compliance issues and challenges
• Drafting, testing, and updating AML policies and procedures
• AML training and capacity building
• Managed AML compliance solutions for crowdfunding  platforms
• Internal and statutory AML/CFT audit solutions for crowdfunding businesses and platforms
• Financial crime prevention framework development focusing on common fraud risks faced by crowdfunding businesses and platforms
• For more information, please visit our specialised Crowdfunding AML/CFT Compliance Solutions page

 

Crowdfunding Platforms’ Compliance Technology Integration

Our services cover compliance aspects concerning the integration of technology for risk and compliance e-management, transactional reporting (where applicable), usage of AI, technology outsourcing, and compliance aspects of third-party risk management for crowdfunding platforms, including:

• Needs Assessment
• Compliance Technology Selection: Based on your budget, products, available operational and technical resources, and the applicable crowdfunding platforms’ compliance obligations
• Implementation assistance across the organisation
• Streamlining operational workflows: For routine compliance tasks like data collection, reporting, and risk assessments
• AML/CFT Compliance Technology: Covering customer digital onboarding, E-KYC, PEP and sanctions screening, transaction monitoring, etc.
• Integration of crowdfunding platforms’ compliance obligations into an effective CRM system
• Record-Keeping Obligations: Helping you choose and integrate the necessary tools to comply with the record-keeping requirements under various laws and crowdfunding regulations

 

Data Management and Information Privacy Solutions

• Data Governance and Compliance:  Assisting crowdfunding businesses and platforms in establishing robust data governance procedures, programs, and protocols that align data collection, storage, and usage practices with relevant data privacy regulations, such as GDPR, CCPA, and other applicable laws. These measures safeguard sensitive client and business information from unauthorised access, breaches, and misuse.
• Privacy Policy Compliance Monitoring: Helping you implement privacy policies that reflect the latest data protection legislation, supported by continuous compliance monitoring tools to maintain the highest data privacy standards.
• Record Maintenance Protocols:  We assist in developing and implementing effective procedures for maintaining necessary records, covering crowdfunding platforms’ compliance with applicable regulatory reporting standards and reporting requirements.
• Record Availability and Inspection Readiness:  Crowdfunding platforms’ regulations often require records to be readily available for inspection by regulators, AML/CFT supervisors, tax agencies, and other relevant authorities. This extends to information kept by your outsourced service providers. We help you organise your record-keeping processes to meet these needs.

 

ISO Standards and Crowdfunding Platforms’ Compliance

• Cross-Reference Mapping: Integrating ISO standards such as ISO 27001, ISO 9001, and ISO 22301 into an existing compliance framework and linking specific sections of ISO standards to corresponding procedures in your internal policies and procedures.
• Pre-Audit Preparation: Coordinating ISO controls testing across different parts of the business.
• Leading evidence collection across the different departments to cover relevant compliance areas such as planning, governance, organisational controls, operational controls, technological controls, and physical controls through structured workflows.
• Digital Compliance Repository: Helping you utilise a centralised digital repository for storing all compliance-related documents and evidence, making it easily accessible for audit purposes and compliance verification.
• ISO Audit Liaison:  Acting as a liaison between your team and the auditors, coordinating information requests, and ensuring all the necessary documentation is readily available.
• Post-Audit Remediation Management: We can lead the implementation of your remediation plan and support corrective actions to address all audit findings effectively.

 

Regulatory Change Management Solutions

Empower Your Business with Proactive Regulatory Change Management:

• Stay Ahead of the Curve:  We actively monitor regulatory updates from global financial authorities like MAS, ASIC, FMA, FCA, SEC, and other regulators for crowdfunding platforms’ compliance changes and updates to evaluate the implications of regulatory changes.
• Impact Assessment and Mitigation Strategies: We analyse the potential impact of regulatory changes on crowdfunding platforms’ compliance management frameworks and operational processes. We then collaborate with you to develop effective mitigation strategies that support continued compliance and minimise disruption.
• Seamless Implementation and Change Management:  We guide crowdfunding and platforms through necessary process adjustments, update internal policies and procedures, facilitate a smooth transition through regulatory changes, and assist with effective communication with impacted stakeholders.