FMA has issued its first equity crowd funding licences under the Financial Markets Conduct Act 2013 (FMCA) to PledgeMe and Snowball Effect.
The FMCA enables licensed intermediaries to facilitate the offer of shares by companies using their website. These companies are exempt from the requirement to provide a product disclosure statement. Instead the crowd funding service is required to provide information about its service and the risks of investing through the service to investors. It must also have adequate disclosure arrangements in place so investors can find out about the companies offering shares on the crowd funding website.
Companies are limited to raising no more than $2 million from the public in any 12-month period.
To assist intermediaries apply for a crowd funding licence FMA has released a two-part licensing application guide (which is available here). FMA has also published an information guide for investors here.
Read FMA’s full media release here.