The national regulator must ensure that ACfA has oversight of all securities-based crowdfunding activities in its jurisdiction. It is not possible to have multiple frameworks, SROs or regulatory treatment of securities-based crowdfunding within a single jurisdiction. ACfA’s enforcement mechanisms are guaranteed by its internal resources and its “monopoly” of oversight on securities-based crowdfunding in a given jurisdiction, and include:
- Disciplinary hearings
- Disciplinary actions including the issuance of fines
- Expulsion of members
Where the use of national enforcement mechanisms are deemed necessary by the national regulator, the latter may guarantee this mechanism through a Joint Approval Process (“JAP”) of crowdfunding intermediaries. A JAP allows the national regulator to register a crowdfunding intermediary that has been approved by ACfA and granted the ACfA Label, and outlines the functioning of the joint enforcement process. A JAP provides clarity on possible conflicts of laws and duplication of enforcement mechanisms that arise with a two-tier oversight framework. Finally, a JAP also clarifies the role of national enforcement mechanisms in the case of a cross-border crowdfunding operation.
