Following the introduction of a bill earlier this year to extend access to crowd-sourced equity funding (CSF) to proprietary companies, the Treasury has opened consultation on an exposure draft of the Corporations Amendment (Crowd-sourced Funding) Regulations 2018. The draft regulations outline additional requirements for proprietary companies to access the CSF regime:
- Only eligible proprietary companies with one or more CSF shareholders will be exempt from the takeover rules in the Corporations Act 2001 (Cth) (Act).
- The draft regulations reduce the minimum offer period for eligible CSF companies to 14 days and allow for variations to the terms and consideration offered to increase commercial flexibility. They also simplify the content and structure requirements of CSF offer documents for both public and proprietary companies and include the ability to present some required information in a summary format if there is overlap between sections and being able to present the offer document online.
- For proprietary companies, the draft regulations outline additional requirements such as shareholder approval for related party transactions, financial statement audits once the CSF offer has raised over A$3 million and the provision of annual financial statements online.
- For both public and proprietary companies, the Regulations provide that CSF intermediaries must check director and intended director identities, such checks to be conducted via authenticated electronic records.
Consultation on the draft regulations closes on 2 February 2018.