The Australian Securities and Investments Commission (ASIC) have announced new guidance for public companies and crowd-funding platform operators to help them comply with their new crowd-sourced funding (CSF) regime.
The new CSF regime will commence on 29 September 2017, and the criteria for companies using it includes:
- Investors are limited to invest $10,000 per company per 12-month period
- Companies may raise up to $5 million in any 12-month period
- Companies must have assets and annual turnover of $25 million or less
What is crowd-sourced funding?
According to ASIC’s crowdfunding regulatory guide, “crowd-sourced funding involves a company raising funds—usually through an online intermediary—from a large number of individual investors who make relatively small financial contributions to the company.”
It’s an invaluable tool for start-ups and small to medium sized companies to access capital from investors.
Previously, ASIC has stated that crowdfunding platforms must play a ‘gatekeeper’ role for intermediates operating platforms for CSF offers.
ASIC Commissioner John Price has advised that ASIC’s new guidance will “help public companies and crowd-funding platform operators comply with their obligations under the new CSF regime, while supporting investor confidence”.
The CSF regime forms part of the Government’s FinTech Priorities, released in March 2016, to help “promote Australia’s FinTech capability by supporting the evolution of our FinTech start‑ups and innovators to develop, test and globally launch their innovative financial products and services.”