A Note to Retail Investors Outside the United States
Before creating a JKBX account, please read the following details, explaining why international investors should expect to hold their Royalty Shares indefinitely.
We are so excited, and humbled, that you are here on JKBX.com and interested in purchasing Royalty Shares.
As you may know, we operate a U.S.-centric platform. That means we built our product capabilities with a focus on regulatory compliance rules required by United States regulators. Unfortunately, it also means that investors in other countries may face certain challenges — challenges we aim to help you navigate as best we can, and with full transparency.
We believe it’s our responsibility to fully explain one unique hurdle: selling your Royalty Shares. Here are five things you should understand before starting your JKBX journey.
1. How to know if this impacts you
When we say “international customer” or “investor outside the U.S.,” we’re describing someone who does not meet one of the following criteria:
- A United States Citizen
- A permanent resident of the United States
- Someone with a valid United States passport
- Someone with a valid United States Social Security number
If you meet any of those descriptions, the following details don’t apply to you.
2. Different country = different regulators
Every country has its own regulatory framework and requirements for companies like ours.
In the U.S., the regulator for financial services firms and financial markets is the Securities and Exchange Commission (SEC) — so JKBX issuers submit Royalty Shares for qualification through the SEC. But in the United Kingdom, for example, online brokers looking to conduct business with traders from their local market must receive authorization from the Financial Conduct Authority (FCA) — the UK’s equivalent of the SEC.
3. We can’t facilitate secondary sales outside the U.S.
Our vision is to facilitate secondary sales of Royalty Shares on an SEC regulated alternative trading system (ATS) by utilizing the services of a FINRA Member Broker-Dealer. A secondary market is what enables investors to be able to trade shares they buy on the Primary market.
Because we take regulatory compliance seriously (which we believe is the right thing to do for our customers), we will not and cannot operate a secondary market outside of the US until we seek and receive regulatory approval from the appropriate regulators. Our goal is to make this possible in the future. But for now, this means that…
4. You should be prepared to hold any Royalty Shares you purchase
At the moment, non-US customers may be able to purchase Royalty Shares on the JKBX platform but they will not, and might never, be able to sell those Royalty Shares.
Music assets are seen as stable investments by some professionals, with values increasing over time. So, for those who prefer to hold their investments for the long run, this inability to trade your Royalty Shares on a secondary market might not pose an issue. But if you’re looking for securities you can trade frequently, this may not be the best platform for you right now.
5. Please do what’s right for you
We encourage every customer to think carefully before making a purchase on JKBX.com. All investing comes with risk, JKBX is not a registered investment adviser and as such we encourage you to speak with a financial advisor on what makes the most sense for you.
Here’s a more thorough legal disclaimer you should review.
We do not currently intend to list the Royalty Shares for trading on a national securities exchange. We may, in the future, facilitate secondary sales of Royalty Shares on an alternative trading system owned by an SEC-registered broker-dealer and a member of FINRA and the Securities Investors Protection Corporation (“SIPC”), referred to as the “ATS.” Additionally, we may engage the services of an SEC-registered broker-dealer and a member of FINRA and SIPC to provide Holders of the Royalty Shares with access to the ATS through the Jukebox Platform. No assurance can be given that the Company, the ATS or any such broker-dealer we engage will be in a position to facilitate sales of the Royalty Shares or, in the event they are able to facilitate such sales, provide an effective means of selling your Royalty Shares or that the price at which any Royalty Shares may be sold through any broker-dealer or ATS with the assistance of such broker-dealer (or otherwise) will be reflective of the actual value of the Royalty Shares or the underlying Royalty Rights. If secondary sales of Royalty Shares are possible on the ATS, such sales may be subject to fees imposed by the ATS and/or the broker-dealer we engage or other broker-dealers operating on the ATS.
Still ready to invest?
Get StartedBio: With JKBX, you can invest in something everyone knows and loves — music. Join JKBX today to stay up to date on the latest Royalty Shares opportunities.
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FAQ
JKBX (pronounced "Jukebox") unlocks shared value from things people love by offering consumers access to royalties as an asset class.
The short: JKBX is a platform where you can invest in Royalty Shares of hit songs.
The long: JKBX is a platform for investing in shares of the income generated from music royalties by purchasing Royalty Shares. If you’re a music superfan looking for a deeper connection with the music you love, now you can turn your playlist into a passive income stream.
For every piece of music, there are two copyrights: one for the composition and another for the recording of that composition. Music royalties are payments made to the creators and rights holders of music — the people who created or own the copyrights — for the authorized use of their work. These royalties and fees serve as compensation for the use of copyrighted music. They’re typically paid by entities such as streaming platforms, radio stations, television networks, film studios, and live performance venues.
Music royalties play a crucial role in supporting songwriters, artists, publishers, and labels by providing them with ongoing income for their creative works and resources to invest in creating new works. Investors can acquire music Royalty Shares, which entitle them to a portion of royalty income.
There are several sources of income interests generated by the use of copyrighted music. They include:
Composition:
- Mechanical: These royalties are paid to songwriters, publishers, and administrators for the reproduction and distribution of their compositions. They are generated from physical and digital sales and streaming of the composition.
- Public Performance: These royalties are collected by performance rights organizations (PROs) and paid to songwriters, publishers, and administrators. They’re earned when a composition is performed publicly or broadcasted, including on radio, TV, live performances, and certain streaming platforms.
- Synchronization: These fees are earned when a composition is synchronized with visual media, such as movies, TV shows, commercials, and video games. The rights holders receive payment for the use of their music in these visual productions.
- Other: This could include income generated by print, karaoke, or social media, or other income generated by a composition that doesn’t fit clearly into any of the above categories.
- Remix: Some compositions include rights associated with related remixed versions of such composition. The rights associated with remixes generally accrue royalties from the various income interest sources described above in this list.
Sound Recording:
- Sales: These royalties are generally paid to record labels from the sale of records in all formats (physical, downloads, and streams).
- Neighboring Rights/Digital Performance: These are public performance royalties paid to the owner of the recording of the song performed and to the performers whose performance was recorded. They are generated by exploitations outside of the United States or when their recordings are played over digital and satellite radio in the US, such as Pandora, Sirius, and iHeartRadio when they collect similar “digital performance royalties.”
- Synchronization: These fees are earned when a sound recording is synchronized with visual media, such as movies, TV shows, commercials, and video games. The rights holders receive payment for the use of their music in these visual productions.
- Other: This includes income generated by social media and or other income generated by a recording that doesn’t fit clearly into any of the above categories.
- Remix: Some recordings include rights associated with related remixed versions of such recording. The rights associated with remixes generally accrue royalties from the various income interest sources described above in this list.
- Royalty Participants: These royalties generated by the various exploitations of the sound recording are paid to producers, artists, engineers, and other key stakeholders. These royalties accrue from the various income interest sources described above in this list.
Royalty Shares are the securities offered by issuers on the JKBX platform. They represent a contractual right to receive a specified portion of royalties, fees, and other income streams contained in the income interests the issuer receives that relate to royalty rights for a specific music asset or a compilation of music assets.
For the sake of clarity, by purchasing Royalty Shares you will not receive any equity interest in JKBX, any of its affiliates, or any other party, additional rights or licenses, including but not limited to copyrights, trademarks, voting rights, or commercial/personal usage rights, or any physical products. The Royalty Shares offered on the JKBX platform are not the same as shares of any company’s stock.
We are open to international investors that meet their applicable securities regulations, however JKBX is currently optimized for US-based individuals. At this time we only offer English-language customer support in US time zones, and not all product functionality may be available internationally.
Additionally, it's important to note that regulatory and legal requirements may differ between countries, so international investors should ensure compliance with the applicable laws and regulations in their respective jurisdictions.