The new Corporations Amendment (Crowd-sourced Funding) Regulations 2017 make changes to the Corporations Regulations 2001 (Cth) to give effect to the new crowd-sourced funding (CSF) regime which is set to commence on 29 September 2017.
In summary, the Regulations prescribe:
- the classes of securities that may be offered under the CSF regime;
- the minimum content requirements for the offer document that must be prepared for each CSF offer;
- the content requirements of the general CSF risk warning and retail investor risk acknowledgement;
- the checks that a CSF intermediary must conduct in relation to each CSF offer and what constitutes a reasonable standard in relation to checks; and
- when conduct of a company or CSF intermediary relating to a CSF offer will not constitute providing financial product advice.
See also the explanatory statement.
ASIC has also released the following 2 consultation papers which propose guidance for public companies and intermediaries (i.e. crowd funding platform operators) to assist them in using the CSF regime:
- CP 288 Crowd-sourced funding: Guide for public companies, which aims to assist companies seeking to raise funds through CSF to navigate the new regime and to understand and comply with their obligations, particularly given many of these companies will not have experience in making public offers of their shares; and
- CP 289 Crowd-sourced funding: Guide for intermediaries, which aims to assist intermediaries seeking to provide a crowd-funding service, particularly given this is a new type of financial service and there are unique gatekeeper obligations for intermediaries operating platforms for CSF offers.
Submission on the Consultation Papers are due by 3 August 2017.
See also ASIC’s media release dated 22 June 2017.
For further details on the CSF regime, see:
- see Crowd-sourced Equity Funding dated 19 November 2016 by Peter Reeves and Georgina Willcock;
- The wisdom of Crowd-sourced Equity Funding by Deborah Johns and Peter Reeves dated 30 March 2017; and
- Two’s company: Proprietary Companies to Access Crowd-sourced Equity Funding Regime by Peter Reeves, Deborah Johns, Georgina Willcock and Jack Coles dated 11 May 2017.