MI Gov Snyder Signs Law to Create Secondary Markets for Crowdfunded Securities

Michigan Gov. Rick Snyder recently signed a new law (HB 5273) that will allow for the creation of secondary markets through which intrastate crowdfunded securities can be listed, sold and resold. Under the new securities exemption, broker-dealers interested in establishing an exchange (online or in person) must apply and be registered with the state as well as follow rules of operation laid out in the legislation. They also must take steps to ensure that both businesses and investors are protected from fraud and are located in the state. The bill is intended to complement legislation passed earlier this year that will allow Michigan businesses to raise up to $2 million from non-accredited Michigan investors (Read related Digest Article). The creation of secondary markets provides a solution to one of the primary issues stalling intrastate crowdfunding across the country, a lack of liquidity due to the difficulty of connecting buyers with sellers. Read the bill…