The Capital Markets (Investment-Based Crowdfunding) Regulations

These Regulations may be cited as the Capital Markets (Investment Based Crowding) Regulations.

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Jurisdiction: Kenya
Instrument: Notice
Citation: Legal Notice 175 of 2022
Version: Undated source snapshot
Language: en

Source attribution: Source: Kenya Law

Statute overview

About this statute

These Regulations may be cited as the Capital Markets (Investment Based Crowding) Regulations. This section provides definitions for terms used in the Regulations (for example: "Act", "Authority", "crowdfunding", "crowdfunding platform", "crowdfunding platform operator", "custodian", "investment-based crowdfunding", "investor", "investment instruments", "issuer", "key personnel", "liquid capital", "medium enterprise", "micro enterprise", "retail investor", "small enterprise", "sophisticated investor", "start-up", "trading facility", and "trust account"). These Regulations apply to investment-based crowdfunding platforms established, maintained or operated in Kenya; operators outside Kenya who actively target Kenyan investors are considered targeting and must obtain a license. The Authority must give an applicant an opportunity to be heard before refusing to grant a licence; after hearing, if it refuses it must notify the applicant within fourteen days stating the grounds; an aggrieved applicant may appeal to the Capital Markets Tribunal within fifteen days of that communication. The Authority may suspend, restrict or revoke a crowdfunding platform operator's licence.

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Provisions of The Capital Markets (Investment-Based Crowdfunding) Regulations

Showing 39 of 39

Part I

PRELIMINARY

1
PRELIMINARY - 1. Citation

AI-assisted research summary: These Regulations may be cited as the Capital Markets (Investment Based Crowding) Regulations.

Section 1. Citation Section These Regulations may be cited as the Capital Markets (Investment Based Crowding) Regulations.
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PRELIMINARY - 2. Interpretation

AI-assisted research summary: This section provides definitions for terms used in the Regulations (for example: "Act", "Authority", "crowdfunding", "crowdfunding platform", "crowdfunding platform operator", "custodian", "investment-based crowdfunding", "investor", "investment instruments", "issuer", "key personnel", "liquid capital", "medium enterprise", "micro enterprise", "retail investor", "small enterprise", "sophisticated investor", "start-up", "trading facility", and "trust account").

Section 2. Interpretation Section In these Regulations, unless the context otherwise requires— "Act" means the Capital Markets Act; "Authority" means the Capital Markets Authority established under section 5 of the Act; "cooling off period" means a contractual period within which an investor can withdraw from a crowdfunding transaction without any restrictions; "crowdfunding" means the act of raising money from many individuals or entities to either finance a project or business through a crowdfunding platform; "crowdfunding platform" means a website, internet based portal or such other technological application, which facilitates interactions between investors and issuers and other related interactions; "crowdfunding platform operator" means an entity licensed by the Authority to facilitate transactions involving the offer or sale of investment instruments through a crowdfunding platform; "custodian" means a bank licensed under the Banking Act ( Cap. 488 ) and appointed by the Crowding Platform Operator to receive and hold funds raised through the crowding platform; "investment-based crowdfunding" means crowdfunding in exchange for shares, debt securities or any other investment instruments approved by the Authority; "investor" means any person or entity that seeks to make, or has made an investment through a crowdfunding platform; "investment instruments" means securities as defined under the Act; "issuer" means a company which issues the security or investment instrument, which is hosted on the crowdfunding platform for purposes of crowdfunding; "key personnel" has the meaning assigned to it under the Act; "liquid capital" means part of an entity’s assets that it holds as cash or assets that can easily be converted into cash; "medium enterprise" means a company whose annual turnover ranges between five million and fifty million Kenya shillings and employs between fifty to three hundred employees; "micro enterprise" means a company registered as such under the Micro and Small Enterprises Act (Cap. 499C); "retail investor" means an investor who is not a sophisticated investor; "small enterprise" means a company registered as such under the Micro and Small Enterprises Act (Cap. 499C); "sophisticated investor" has the meaning assigned to it under the Act; "start-up" means a company incorporated in Kenya that is newly established or has not been in existence for more than ten years, which is established for the sole purpose of developing an innovative and scalable product or service; "trading facility" means system that facilitates the exchange of crowdfunded investment instruments between parties; and "trust account" means a bank account opened in trust by the Crowdfunding Platform Operator for the benefit of the issuers and investors and managed and monitored by the Custodian.
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PRELIMINARY - 3. Application

AI-assisted research summary: These Regulations apply to investment-based crowdfunding platforms established, maintained or operated in Kenya; operators outside Kenya who actively target Kenyan investors are considered targeting and must obtain a license.

Section 3. Application Section 3(1) These Regulations shall apply to an investment-based crowdfunding platform established, maintained or operated in Kenya. Section 3(2)(a) the platform is established in Kenya; Section 3(2)(b) the platform is located outside Kenya but actively targets Kenyan investors as provided for under sub-regulation (3); or Section 3(2)(c) the key components of the platform when taken together are physically located in Kenya even if any of its component parts, in isolation, is located outside Kenya. Section 3(3) For purposes of these Regulations, a crowdfunding platform operator located outside Kenya shall be considered as actively targeting investors in Kenya if the operator, or the operator’s representative, promotes crowdfunding activities either directly or indirectly in Kenya. Section 3(4) A crowdfunding platform operator deemed to be actively targeting investors in Kenya for purposes of these Regulations shall be required to obtain a license from the Authority. Section 3(5)(a) advertising the crowdfunding platform, investment instruments that are subject to the crowdfunding or the issuer hosted on the platform in any publication or electronic media in Kenya; Section 3(5)(b) sending direct mail to a Kenyan address or electronic message to a person domiciled in Kenya marketing or promoting the crowdfunding platform or activity; or Section 3(5)(c) direct or indirect solicitation through agents. Section 3(6) Notwithstanding subregulations (1), (2), (3), (4) or (5), in determining whether a crowdfunding platform is targeting investors in Kenya, the Authority shall assess all relevant facts and circumstances while taking into account the protection of investors and the integrity of Kenya’s capital markets.

Part II

THE CROWDFUNDING PLATFORM OPERATOR

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THE CROWDFUNDING PLATFORM OPERATOR - 10. Denial of grant of license

AI-assisted research summary: The Authority must give an applicant an opportunity to be heard before refusing to grant a licence; after hearing, if it refuses it must notify the applicant within fourteen days stating the grounds; an aggrieved applicant may appeal to the Capital Markets Tribunal within fifteen days of that communication.

Section 10. Denial of grant of license Section 10(1) The Authority shall not refuse to grant a licence without first giving the applicant an opportunity to be heard. Section 10(2) If the Authority, after hearing the applicant, refuses to grant a licence, it shall communicate the decision to the applicant within fourteen days of the decision, stating the grounds for refusal. Section 10(3) An applicant aggrieved by the decision of the Authority may appeal against such refusal to the Capital Markets Tribunal within fifteen days of communication of the decision.
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THE CROWDFUNDING PLATFORM OPERATOR - 11. Suspension, restriction or revocation of a licence

AI-assisted research summary: The Authority may suspend, restrict or revoke a crowdfunding platform operator's licence.

Section 11. Suspension, restriction or revocation of a licence Section The Authority may suspend, restrict or revoke a crowdfunding platform operator’s licence in accordance with sections 26 of the Act.
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THE CROWDFUNDING PLATFORM OPERATOR - 12. Cessation of business

AI-assisted research summary: A crowdfunding platform operator must not stop operating without giving the Authority thirty days’ written notice.

Section 12. Cessation of business Section A crowdfunding platform operator shall not cease to operate as such without prior thirty days’ notice in writing to the Authority who may impose any terms and conditions to ensure orderly cessation of business of the crowdfunding platform operator.
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THE CROWDFUNDING PLATFORM OPERATOR - 4. Licensing requirement

AI-assisted research summary: A person must not establish, maintain, or operate an investment-based crowdfunding platform unless licensed by the Authority.

Section 4. Licensing requirement Section 4(1) A person shall not establish, maintain or operate an investment based crowdfunding platform unless that person is duly licenced as a crowdfunding platform operator by the Authority. Section 4(2) A person who contravenes sub regulation (1) commits an offence and is liable to the penalty prescribed in section 34A of the Act.
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THE CROWDFUNDING PLATFORM OPERATOR - 5. Application for licence and accompanying documents

AI-assisted research summary: Application for a licence must include a certified copy of the certificate of incorporation.

Section 5. Application for licence and accompanying documents Section a certified copy of certificate of incorporation;
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THE CROWDFUNDING PLATFORM OPERATOR - 6. Eligibility for licensing

AI-assisted research summary: Eligibility requires the section to be a company limited by shares.

Section 6. Eligibility for licensing Section is a company limited by shares;
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THE CROWDFUNDING PLATFORM OPERATOR - 7. Criteria for licensing

AI-assisted research summary: States that the Section has complied with the licensing requirements set out in regulation 5.

Section 7. Criteria for licensing Section has complied with the licensing requirements set out in regulation 5;
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THE CROWDFUNDING PLATFORM OPERATOR - 8. Rules for the operation of business

AI-assisted research summary: Requires rules for the operation of business and criteria for onboarding its users, including issuers and investors.

Section 8. Rules for the operation of business Section criteria for on boarding its users including issuers and investors;
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THE CROWDFUNDING PLATFORM OPERATOR - 9. Grant of a license

AI-assisted research summary: The Authority must grant a licence to operate as a crowdfunding platform operator if the applicant meets all licensing requirements and pays the fees in the Third Schedule; the crowdfunding platform operator must pay an annual regulatory fee; the Authority may suspend or revoke a licence under regulation 11.

Section 9. Grant of a license Section 9(1) The Authority shall, if satisfied that the applicant has met all the requirements for licensing and upon payment of the fees set out in the Third Schedule, grant a licence to operate as a crowdfunding platform operator. Section 9(2) The crowdfunding platform operator shall be required to pay an annual regulatory fee as set out in the Third Schedule. Section 9(3) A licence granted shall remain valid unless suspended or revoked by the Authority as specified under regulation 11.

Part III

CROWDFUNDING PARTICIPANTS

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CROWDFUNDING PARTICIPANTS - 13. Eligible issuers

AI-assisted research summary: Micro, small or medium enterprises incorporated in Kenya with at least two years’ operating track record and good corporate governance, and start-ups with a good operating track record and good corporate governance, are eligible to raise funds through a crowdfunding platform in exchange for issuing an investment instrument.

Section 13. Eligible issuers Section 13(1) A micro, small or medium enterprise incorporated in Kenya with a minimum of two years’ operating track record and a good corporate governance record shall be eligible to raise funds through a crowdfunding platform in exchange for the issuance of an investment instrument. Section 13(2) Despite sub-regulation (1), start-ups with a good operating track record and a good corporate governance record shall be eligible to raise funds through a crowdfunding platform.
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CROWDFUNDING PARTICIPANTS - 14. Fundraising limits

AI-assisted research summary: Crowdfunding issuers who are eligible micro, small and medium enterprises or startups are limited to raising at most Kenya shillings one hundred million in any twelve‑month period; a crowdfunding platform operator may apply to the Authority for a no-objection to exceed that limit; the Authority may issue a no-objection subject to conditions.

Section 14. Fundraising limits Section 14(1) The aggregate amount that may be raised by an eligible micro, small and medium enterprises or startup within a twelve months period shall be a maximum amount of Kenya shillings one hundred million. Section 14(2) A crowdfunding platform operator may apply to the Authority for a no-objection where an issuer seeks to raise more than the set maximum amount within the given duration. Section 14(3) The Authority may issue a no-objection to raise additional funds subject to such conditions as may be imposed from time to time.
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CROWDFUNDING PARTICIPANTS - 15. Prohibited issuers

AI-assisted research summary: Section titled "Prohibited issuers"

Section 15. Prohibited issuers
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CROWDFUNDING PARTICIPANTS - 16. Eligible investors

AI-assisted research summary: Section 16. Eligible investors Section sophisticated investors; and

Section 16. Eligible investors Section sophisticated investors; and

Part IV

THE CROWDFUNDING TRANSACTION

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THE CROWDFUNDING TRANSACTION - 17. Permitted investment instruments

AI-assisted research summary: For crowdfunding under these Regulations, permitted investment instruments include shares, debt securities (including bonds or debentures) and any other instruments approved by the Authority.

Section 17. Permitted investment instruments Section Investment instruments allowed for purposes of crowdfunding under these Regulations include shares, debt securities including bonds or debentures or any other instruments as shall be approved by the Authority from time to time.
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THE CROWDFUNDING TRANSACTION - 18. Offering document

AI-assisted research summary: Requires crowdfunding platform operators to create a standardized offering document with specified disclosures, submit it to the Authority at least forty-eight hours before publication, make it available on the platform at least fourteen days before the offer period, restricts other distribution channels, and creates an offence for knowingly false or misleading statements.

Section 18. Offering document Section 18(1) A crowdfunding platform operator shall develop a standardized offering document for entities offering securities, which shall have the disclosures set out in the Fourth Schedule and shall be submitted to the Authority not later than forty-eight hours prior to publication. Section 18(2) The crowdfunding platform operator shall make available the offering document through the crowdfunding platform to the investors at least fourteen days before the commencement of the offer period. Section 18(3) The issuer and the crowdfunding platform operator shall not avail the offering document on any other communication medium other than the crowdfunding platform on which the issuer intends to offer its securities. Section 18(4) A person who makes a false or misleading statement in form or context in an offering document knowing the statement to be false or misleading shall commit an offence and is liable to the penalties under the Act.
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THE CROWDFUNDING TRANSACTION - 19. Requirements for issuers

AI-assisted research summary: Issuers must clearly outline in the offering document investors’ rights and ownership of the investment instruments to be issued.

Section 19. Requirements for issuers Section clearly outline, in the offering document, investors’ rights and ownership of the investment instruments to be issued;
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THE CROWDFUNDING TRANSACTION - 20. Crowdfunding transaction

AI-assisted research summary: Rules governing crowdfunding offers: withdrawal and refund when minimum threshold not met; time limits for refunds, fund disbursement, cooling-off rights, communication of changes, and restart of offerings.

Section 20. Crowdfunding transaction Section 20(1)(a) the period in which the offer shall remain open; and Section 20(1)(b) the threshold amount for the offer to be deemed a successful offer. Section 20(2) Where an issuer is unable to meet the prescribed minimum threshold for the targeted amount, the offer shall be withdrawn and the crowdfunding platform operator shall effect a refund of the monies to the investors within forty-eight hours and the costs for such refunds shall be fully borne by the issuer. Section 20(3) Where an offer is withdrawn under sub regulation (2), the issuer may only commence a fresh crowdfunding offering not earlier than ninety days after the said withdrawal. Section 20(4) Where the crowdfunding transaction is successful, the crowdfunding platform operator shall make the funds available to the issuer within five business days after the close of the offer. Section 20(5) The crowdfunding offer by the issuer shall include a contractual right of a cooling off period allowing the investor to withdraw an offer or agreement to purchase the investment instrument by delivering a notice in the manner prescribed by the crowdfunding platform operator within forty-eight hours from the date of investments subscription, but no withdrawal shall be made after the close of the offer period. Section 20(6) The crowdfunding platform operator shall ensure that any changes made to the offering documents prior to the close of the offer, must be communicated to the investors and the investors shall be given an opportunity to withdraw the investments within forty-eight hours of such communication. Section 20(7) Where an investor cancels the offer or agreement to purchase investment instruments, all funds of the investor shall be refunded or released within forty-eight hours of the request to cancel. Section 20(8) A crowdfunding platform operator who does not comply with the timelines provided in sub-regulations (5) will be liable to the penalties specified under section 25A of the Act.
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THE CROWDFUNDING TRANSACTION - 21. Use of funds

AI-assisted research summary: Crowdfunding platform operators must take reasonable steps to ensure funds raised are used for the stated purpose; issuers who use proceeds for other purposes commit an offence and are liable to penalties.

Section 21. Use of funds Section 21(1) The crowdfunding platform operator shall take reasonable steps to ensure that the funds raised through its platform are used for the stated purpose. Section 21(2) An issuer who uses the proceeds for any other purpose other than that stated or a purpose related thereto commits an offence and shall be liable to the penalties prescribed under the Act.
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THE CROWDFUNDING TRANSACTION - 22. Transaction fees

AI-assisted research summary: Crowdfunding platform operators must levy a transaction fee for each successful crowdfunding transaction as specified in the Third Schedule and remit it to the Authority within thirty days.

Section 22. Transaction fees Section A crowdfunding platform operator shall, in addition to any other fees that they may charge for use of their platform, levy a transaction fee as specified in the Third Schedule for each successful crowdfunding transaction facilitated through its platform which amount shall be payable and remitted to the Authority directly within thirty days of such transaction.
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THE CROWDFUNDING TRANSACTION - 23. Restrictions on crowdfunding platform operator

AI-assisted research summary: Crowdfunding platform operators are restricted from raising their own funds through their platform, offering investment advice, handling investor funds, promising guaranteed returns to investors, or promising guaranteed outcomes to issuers; issuers must not host the same offer on multiple crowdfunding platforms concurrently.

Section 23. Restrictions on crowdfunding platform operator Section 23(1)(a) raising own funds through its own platform; Section 23(1)(b) offering investment advice; Section 23(1)(c) handling investor funds; Section 23(1)(d) promising a guaranteed return to investors; and Section 23(1)(e) promising a guaranteed outcome of the offer to the issuer. Section 23(2) An issuer shall not host an offer concurrently on multiple crowdfunding platforms.

Part V

TRADING FACILITY

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TRADING FACILITY - 24. Requirements of the trading facility

AI-assisted research summary: Crowdfunding platform operators may run a trading facility to transfer crowdfunded investment instruments originally offered on the platform and must meet transparency, information and risk-acknowledgement requirements; the Cabinet Secretary shall formulate rules to regulate trading activities.

Section 24. Requirements of the trading facility Section 24(1) A crowdfunding platform operator may operate a trading facility for the transfer of the crowdfunded investment instruments originally offered on the crowdfunding platform. Section 24(2)(a) have in place transparent rules and procedures for fair and orderly trading on the crowdfunded investment instruments; Section 24(2)(b) inform its platform users on the nature of the facility, including applicable fees; Section 24(2)(c) provide prospective investor(s) intending to buy the investment instruments availed on the facility with information that was availed to the earlier investors and information on the performance of the investment availed on the facility; and Section 24(2)(d) ensure that the prospective investor(s) affirms to the risk acknowledgment form under regulation 29. Section 24(3) The Cabinet Secretary shall formulate such rules as may be required to regulate such trading activities.

Part VI

DUTIES OF A CROWDFUNDING PLATFORM OPERATOR

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DUTIES OF A CROWDFUNDING PLATFORM OPERATOR - 25. Requirements for the crowdfunding platform operator

AI-assisted research summary: The crowdfunding platform operator must discharge its duties as required by these Regulations in relation to a crowdfunding transaction.

Section 25. Requirements for the crowdfunding platform operator Section discharge its duties as required by these Regulations in relation to a crowdfunding transaction;
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DUTIES OF A CROWDFUNDING PLATFORM OPERATOR - 26. General obligations

AI-assisted research summary: Section 26 enumerates information and operational items (how the platform operates; users' rights and responsibilities; eligibility criteria; investor education; complaint handling; disclaimers and limitation of liability; fees and charges) and lists obligations (establish custodial arrangements; monitor compliance; take reasonable steps to prevent fraud and ensure compliance; maintain a register and records of investors and issuers; avail documents on request; notify the Authority immediately of material changes affecting authorization; comply with continuous reporting obligations; perform other obligations required by the Regulations or the Authority).

Section 26. General obligations Section 26(1)(a) how the platform operates; Section 26(1)(b) users rights and responsibilities; Section 26(1)(c) eligibility criteria for prospective issuers and investors; Section 26(1)(d) investor education materials; Section 26(1)(e) complaint handling and dispute resolution procedures; Section 26(1)(f) disclaimers and limitation of liability, highlighting the platforms legal liability for damages incurred by its users; and Section 26(1)(g) related fees and charges for using the platform. Section 26(2)(a) to establish custodial arrangements as required by these Regulations; Section 26(2)(b) to monitor and ensure compliance of its rules; Section 26(2)(c) to take reasonable steps to prevent fraud and ensure compliance with these Regulations and relevant laws; Section 26(2)(d) to maintain a register and records of all investors and issuers including details of the management of all issuers and details of investor holdings; Section 26(2)(e) to avail any relevant document or information to the investor upon request; Section 26(2)(f) to notify the Authority immediately of any material changes that may occur during operations which would affect its authorization and licensing; Section 26(2)(g) to comply with continuous reporting obligations as specified by these Regulations; and Section 26(2)(h) to perform any other obligation as may be required by these Regulations or the Authority.
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DUTIES OF A CROWDFUNDING PLATFORM OPERATOR - 27. Obligations on risk disclosures

AI-assisted research summary: Obligations on risk disclosures

Section 27. Obligations on risk disclosures Section risk warning on investing through the platform;
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DUTIES OF A CROWDFUNDING PLATFORM OPERATOR - 28. Cautionary statement

AI-assisted research summary: Investors must be able to bear loss without undue hardship and must read information carefully; they may seek independent financial advice. Investing in issuers hosted on the platform may be high risk.

Section 28. Cautionary statement Section 28(1)(a) to all visitors to the site of the home page of the platform; Section 28(1)(b) to every investor, on the subscription landing page of the issuer; and Section 28(1)(c) on all application forms for investing through the platform. Section 28(2)(a) investing in the issuers hosted on the platform may be high risk investment; Section 28(2)(b) investors must be in a position to bear the risk associated with the loss of investment without undue hardship; and Section 28(2)(c) investors must read the information carefully and may seek independent financial advice.
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DUTIES OF A CROWDFUNDING PLATFORM OPERATOR - 29. Risk acknowledgement form

AI-assisted research summary: The crowdfunding platform operator must obtain and keep investors' self-declared risk acknowledgement forms before the investors invest on the platform.

Section 29. Risk acknowledgement form Section 29(1)(a) understands that the proposed investment is a risky investment; Section 29(1)(b) has ability to absorb the complete loss of the amount invested; Section 29(1)(c) understands that they may not be able to sell the securities, or investment instruments; Section 29(1)(d) has been provided with the required disclosures for the offer; and Section 29(1)(e) understands that crowdfunding investments are not covered by the Investor Compensation Scheme under the Act. Section 29(2) The information in the risk acknowledgment form shall be provided in a manner that is clear and easily understood by all investors. Section 29(3) The information in the risk acknowledgment form shall be written in such a manner as to be capable of being read with reasonable ease by the investor. Section 29(4) The crowdfunding platform operator shall obtain and retain the self-declared risk acknowledgement forms from the investors prior to them investing on a crowdfunding platform.
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DUTIES OF A CROWDFUNDING PLATFORM OPERATOR - 30. Due diligence

AI-assisted research summary: A crowdfunding platform operator must carry out due diligence on prospective issuers and investors intending to use its platform.

Section 30. Due diligence Section 30(1) A crowdfunding platform operator shall carry out due diligence on prospective issuers and investors intending to use its platform. Section 30(2)(a) conduct background checks on the issuer and investor; Section 30(2)(b) determine the level of sophistication of the investor; Section 30(2)(c) conduct fitness and probity checks on the directors and management; Section 30(2)(d) interrogate the information in the issuer’s disclosure documents lodged before they are made accessible to investors through the platform; Section 30(2)(e) ensure their compliance with anti-money laundering rules in place; and Section 30(2)(f) ensure compliance with the disclosure requirements.
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DUTIES OF A CROWDFUNDING PLATFORM OPERATOR - 31. Operation of trust account

AI-assisted research summary: A crowdfunding platform operator must appoint a custodian to hold funds raised through the platform in trust; the custodian must establish and maintain a separate trust account for each funding round with a financial institution licensed and approved by the Authority as a custodian.

Section 31. Operation of trust account Section 31(1) A crowdfunding platform operator shall appoint a custodian to hold in trust any funds raised through the platform. Section 31(2) The custodian shall establish and maintain a separate trust account for each funding round on its platform with a financial institution duly licensed and approved by the Authority as a custodian.
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DUTIES OF A CROWDFUNDING PLATFORM OPERATOR - 32. Duties of a custodian

AI-assisted research summary: Custodian must open and maintain a segregated account in the name of each issuer for the exclusive benefit of each issue.

Section 32. Duties of a custodian Section opening and maintaining a segregated account in the name of each issuer for the exclusive benefit of each issue; and
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DUTIES OF A CROWDFUNDING PLATFORM OPERATOR - 33. Data protection and privacy

AI-assisted research summary: Section shall establish appropriate safeguards to ensure the integrity of information received and published.

Section 33. Data protection and privacy Section shall establish appropriate safeguards for ensuring the integrity of the information received and published;
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DUTIES OF A CROWDFUNDING PLATFORM OPERATOR - 34. Record keeping

AI-assisted research summary: Lists specific records to be maintained for crowdfunded investments and requires that records be kept for at least seven years from the date the information was lodged in the portal.

Section 34. Record keeping Section 34(1)(a) a detailed list of all the issuers and investors; Section 34(1)(b) evidence of individual holdings of each investor; Section 34(1)(c) a record of past and present holders of the crowdfunded investments and their holdings; and Section 34(1)(d) a transfer journal or log recording the transfer of the crowdfunded investments. Section 34(2) All records shall be kept for a period of at least seven years from the date which the information was lodged in the portal.
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DUTIES OF A CROWDFUNDING PLATFORM OPERATOR - 35. Continuous reporting

AI-assisted research summary: Continuous reporting requirements listing issuer details, investor statistics, quarterly monitoring reports, and other information the Authority may require; quarterly management accounts and audited annual accounts within four months of year end.

Section 35. Continuous reporting Section 35(1)(a) details of the issuers and amounts raised through its platform; Section 35(1)(b) statistics on investor profiles and investment trends; Section 35(1)(c) a quarterly monitoring report on the use of proceeds; and Section 35(1)(d) any other information as the Authority may require from time to time. Section 35(2)(a) on a quarterly basis management accounts for each quarter; and Section 35(2)(b) audited annual accounts within four months following the end of its financial year.

Part VII

GENERAL PROVISIONS

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GENERAL PROVISIONS - 36. Inspections

AI-assisted research summary: The Authority may carry out inspections of a crowdfunding platform operator or its facilities and satisfy itself about platform integrity, financial soundness and stability, risk management and control systems.

Section 36. Inspections Section The Authority may carry out inspections on a crowdfunding platform operator or on any of its facilities satisfy itself as to the integrity of the platform, financial soundness and stability, risk management and its control systems.
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GENERAL PROVISIONS - 37. Offence

AI-assisted research summary: Any person who contravenes these Regulations for which no penalty is provided is liable, upon conviction, to the penalty specified under section 34A of the Act and to general damages where applicable.

Section 37. Offence Section Any person who contravenes the provisions of these Regulations for which no penalty is provided, that person shall be liable, upon conviction, to the penalty specified under section 34A of the Act and general damages where applicable, for any loss occasioned to the other party.
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GENERAL PROVISIONS - 38. Applicability of capital markets laws

AI-assisted research summary: Section 38. Applicability of capital markets laws Section the Capital Markets (Conduct of Business)(Market Intermediaries) Regulations (LN. No. 145/2011);

Section 38. Applicability of capital markets laws Section the Capital Markets (Conduct of Business)(Market Intermediaries) Regulations (LN. No. 145/2011);
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GENERAL PROVISIONS - 39. Transition provision

AI-assisted research summary: Persons operating or representing themselves as investment-based crowdfunding platform operators before these Regulations commence must obtain a license within twelve months after commencement.

Section 39. Transition provision Section Any person operating an investment-based crowdfunding platform or holding itself out as a crowdfunding platform operator prior to the commencement of these Regulations shall obtain a license within twelve months after the commencement of these Regulations.

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