The rules do not impose a cap on the amount that non-professional investors can invest through crowdfunding, becoming probably the first case of crowdfunding regulation which does not adopt any limitation on the investor side. The government justified this decision saying that imposing a cap on the investment would hinder the development of a local securities crowdfunding industry and would encourage investors to circumvent the limitation, by investing in foreign platforms or through means which do not reveal the ultimate owner.
Other methods to protect the investors will be used, for instance, the requirement for licensed platforms to conduct background checks on issuers and directors, and the requirement to make investors aware of the risks associated with investment in securities crowdfunding.
Will this regulation work better than others which impose more stringent requirements? We’ll see in a few months.
Parker, T. (2014). Crowdfunding gets gov sign off. The New Zealand Herald.
Pullar-Strecker, T. (2014). Crowdfunding gets go-ahead. Stuff.co.nz
Image credit to: 4nitsirk. bit.ly/1nrgqg3
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.