In April 2014, New Zealand passed a new law, granting entrepreneurs the opportunity to use crowdfunding platforms for financial lending and borrowing purposes. The Kiwis aim to be the leading nation in Asia-Pacific for crowdfunding. But unfortunately, almost 5 months after the law has been changed, the Kiwi crowdfunding industry has been stagnate. That, however, is just about to change.
It has recently been announced by the Financial Markets Authority (FMA) that the financial regulator is ready to finally grant the first batch of licenses for equity crowdfunding platforms. Entrepreneurs and investors have long awaited this step that finalises crowdfunding’s integration into the system. Thus far, no one has been able to take advantage of these new laws; did New Zealand already get too far ahead of itself?
Businesses are able to crowdfund up to $2 million a year through Share issuing or borrowing from investors through newly licensed platforms. No formal documentation will be needed nor will businesses face any hassle from FMA scrutiny. The lax regulations makes it a much simpler process for businesses to search for funds from the public, thereby
A total of five applications for the license and sixteen ‘expression of interest’ have been made to the FMA. The applicants have waited very patiently; within the month of July, the platforms can expect for their license to arrive.
The delay is licenses has caused missed opportunities but the attitude 'down under' is phenomenal. It appears that impacted parties are very accepting of the situation as the industry is new for the both parties involved, that being the government and platforms. The FMA has not been blamed for the delay and is still seen in positive light.
Anna Guenther, Chief Officer of another New Zealand based platform, states, “Everything has been [a] bit slower on all sides than expected, [but] we are building a new industry.”
As Clive Fernandes, CEO of an upcoming platoform, suggests, it may take roughly a year before the crowdfunding industry takes off in New Zealand. Therefore, it does not matter which platform is granted the very first license. In order to speed up the integration process, Franceska Banga, chief executive of an investment fund, reckons that "the early-stage investment community, and particularly angel networks and investors, need to consider how crowdfunding can be integrated with existing investment platforms in order to increase the the capital available to young start-up companies."
New Zealand has a lot to learn from other nation’s where crowdfunding is an established practise and ecosystem. Regulators have kept a particularly close eye on the United States. The Financial Markets Conduct Act provides the potential for New Zealand to be the Asia_pacific leader in crowdfunding, but its neighbours Australia and Singapore are also developing a pro-crowdfunding attitude, though New Zealand has taken more significant steps forward. The region has the resources and attitude to support a flourishing crowdfunding ecosystem, and New Zealand is most definitely paving the way forward.
References:
Hurst, S. (2014). New Zealand's FMA Ready to Grant the first Licenses to Equity Crowdfunding Platforms. crowdfundinsider.com
Luzar, C. (2014). Brief: New Zealand VC Expresses Optimism About Equity Crowdfunding. crowdfundinsider.com
Pullar-Strecker, T. (2014). FMA to Grant First Equity Crowdfunding Licenses. stuff.co.nz
Photo Credit: bit.ly/p/7Cc92f
Businesses are able to crowdfund up to $2 million a year through Share issuing or borrowing from investors through newly licensed platforms. No formal documentation will be needed nor will businesses face any hassle from FMA scrutiny. The lax regulations makes it a much simpler process for businesses to search for funds from the public, thereby
A total of five applications for the license and sixteen ‘expression of interest’ have been made to the FMA. The applicants have waited very patiently; within the month of July, the platforms can expect for their license to arrive.
The delay is licenses has caused missed opportunities but the attitude 'down under' is phenomenal. It appears that impacted parties are very accepting of the situation as the industry is new for the both parties involved, that being the government and platforms. The FMA has not been blamed for the delay and is still seen in positive light.
Anna Guenther, Chief Officer of another New Zealand based platform, states, “Everything has been [a] bit slower on all sides than expected, [but] we are building a new industry.”
As Clive Fernandes, CEO of an upcoming platoform, suggests, it may take roughly a year before the crowdfunding industry takes off in New Zealand. Therefore, it does not matter which platform is granted the very first license. In order to speed up the integration process, Franceska Banga, chief executive of an investment fund, reckons that "the early-stage investment community, and particularly angel networks and investors, need to consider how crowdfunding can be integrated with existing investment platforms in order to increase the the capital available to young start-up companies."
New Zealand has a lot to learn from other nation’s where crowdfunding is an established practise and ecosystem. Regulators have kept a particularly close eye on the United States. The Financial Markets Conduct Act provides the potential for New Zealand to be the Asia_pacific leader in crowdfunding, but its neighbours Australia and Singapore are also developing a pro-crowdfunding attitude, though New Zealand has taken more significant steps forward. The region has the resources and attitude to support a flourishing crowdfunding ecosystem, and New Zealand is most definitely paving the way forward.
References:
Hurst, S. (2014). New Zealand's FMA Ready to Grant the first Licenses to Equity Crowdfunding Platforms. crowdfundinsider.com
Luzar, C. (2014). Brief: New Zealand VC Expresses Optimism About Equity Crowdfunding. crowdfundinsider.com
Pullar-Strecker, T. (2014). FMA to Grant First Equity Crowdfunding Licenses. stuff.co.nz
Photo Credit: bit.ly/p/7Cc92f
About the author - Jasmien Cels
Jasmien is currently studying a bachelors in Business Studies from Cass Business School in London while interning at Crowd Valley. Originally from Belgium, she grew up in Switzerland, Ethiopia, USA, and Japan.
She is very passionate about the start-ups, entrepreneurship, technology, and travelling; she aspires to one day become an entrepreneur.
Jasmien is currently studying a bachelors in Business Studies from Cass Business School in London while interning at Crowd Valley. Originally from Belgium, she grew up in Switzerland, Ethiopia, USA, and Japan.
She is very passionate about the start-ups, entrepreneurship, technology, and travelling; she aspires to one day become an entrepreneur.
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