Before those new crowdfunding intermediaries empowered by the JOBS Act can get down to business they must register with the SEC either as a broker or funding portal.

The catch? The Commission has yet to create a process for those registrations.

When intermediaries do finally get the chance to spring into action, they will need to abide by a growing set of rules that include prohibitions on providing investment advice and soliciting purchases, sales, or offers to buy securities online. They will also need to become members of the Financial Industry Regulatory Authority (FINRA) and provide investors ample warnings of the investment risk.

While the SEC still hammers out rules for implementing crowdfunding provisions of the JOBS Act, it has issued some initial guidance via a new set “Frequently Asked Questions” posted online.

The Q&A items, released on May 7, are not intended as “rules, regulations or statements of the SEC,” and the Commission stresses that it has “neither approved nor disapproved” them. Updates are promised in the weeks ahead.

Title III of the JOBS Act amends Section 4 of the Securities Act to create a new exemption for offerings of so-called crowdfunded securities. Issuers are freed from requirements of Section 5 of that Act when they offer and sell up to $1 million in securities, provided that individual investments do not exceed certain thresholds and the issuer satisfies various conditions, many of which also await rulemaking by the SEC (the clock on a 270-day deadline started ticking with the April 5 enactment of the legislation).

Among the related items thus far detailed by the FAQ:

Issuers must use the services of an intermediary that is either a broker or “funding portal” registered with the SEC and subject to its examination, enforcement, and rulemaking authority. Any offers or sales of securities purporting to rely on the crowdfunding exemption would be unlawful under the federal securities laws until the SEC's rulemaking is complete.

The crowdfunding intermediary cannot offer investment advice or recommendations; solicit purchases, sales, or offers to buy securities offered or displayed on its website or portal; compensate employees, agents, or others for solicitation or based on the sale of securities displayed or referenced on its website or portal; hold, manage, possess, or otherwise handle investor funds or securities

Funding portals must become members of a national securities association that is registered under Section 15A of the Exchange Act. Currently, FINRA is the only national securities association to hold such a status.

Crowdfunding brokers are prohibited from compensating promoters, finders, or lead generators for providing the intermediary with the personal identifying information of any potential investor. They are also not allowed to let directors, officers, or partners (or any person with a similar status or function) have a financial interest in any issuer using the services of the intermediary.

Crowdfunding brokers and funding portals must provide disclosures regarding transaction risks. It is also on them to ensure that each investor reviews mandated educational materials, acknowledges that they understand the risk of losing their entire investment and demonstrate that they can bear such a loss.

The privacy of information collected from investors must be safeguarded and intermediaries need to take measures to reduce the risk of fraud. These efforts include obtaining a background and securities enforcement regulatory history check on each officer, director, and person holding more than 20 percent of the outstanding equity of every issuer whose securities are offered by that person.

Any disclosures provided by the issuer must be made available to investors and the SEC at least 21 days before any sale. All offering proceeds can only be provided to the issuer when the aggregate capital raised from all investors is equal to or greater than a target offering amount. All investors must be allowed to cancel their commitments to invest.