 | Discussions on equity crowdfunding in Australia have been on for more than one year. This financial tool is in fact seen by many as a way to improve access to finance for local SMEs, which is sometimes reported as difficult and inefficient, due also to the fact that the regional VC market is very limited. |
Last June the Australian Financial Authority, the Corporations and Markets Advisory Committee (CAMAC), proposed a set of rules for securities crowdfunding, which we described in this article. However, the drafted rules have not been adopted so far - for the joy of various stakeholders which deem them too restrictive - thus driving the situation to some sort of deadlock.
Recently, signals of revival came with the the publication of two important documents: the Final Report of the Financial Issuers Inquiry and a Treasury’s Discussion Paper on Crowdfunding. The former, which was made public in November, highlighted the necessity of doing some reforms to fuel the early stage finance market and facilitate access to finance for SMEs. In particular it also recommended to facilitate crowdfunding “by adjusting fundraising and lending regulation, streamlining issuers’ disclosure requirements and allowing retail investors to participate in this new market with protections such as caps on investment.” The latter, instead, is a document published at the beginning of December by the Australian Government Treasury which recognizes that action is needed to overcome the current regulatory barriers to widespread use of crowdfunding in Australia. The discussion paper also analyzes the different policy options at hands, such the regulatory approach suggested by CAMAC back in June and New Zealand’s, which was put into effect last April, and is considered to be the most liberal in the world. The Government’s Treasury is currently seeking feedback from the public on its discussion paper on crowdfunding, which will probably constitute valuable input for local authorities’ future work on the topic, if the Government decides that further action is needed.
If, how and when the Australian legal framework for securities crowdfunding will change, it’s yet to be known. In the meantime the regional crowdfunding market is forming, with different business models emerging all over. And this increasing pool of stakeholders, together with SMEs and startups hungry for growth capital, will soon demand action.
References
Beatty, A., Lynch, B., Lyons, R. & Tam, B. (2014). Treasury Releases Discussion Paper on Crowd-Sourced Equity Funding. JD Spura Buiseness Advisor.
Alois, JD. (2014). Australia Financial System Inquiry Issues Final Report. Corwdfund Insider.
Image credit to: vagawi http://bit.ly/1y2CtRn
Recently, signals of revival came with the the publication of two important documents: the Final Report of the Financial Issuers Inquiry and a Treasury’s Discussion Paper on Crowdfunding. The former, which was made public in November, highlighted the necessity of doing some reforms to fuel the early stage finance market and facilitate access to finance for SMEs. In particular it also recommended to facilitate crowdfunding “by adjusting fundraising and lending regulation, streamlining issuers’ disclosure requirements and allowing retail investors to participate in this new market with protections such as caps on investment.” The latter, instead, is a document published at the beginning of December by the Australian Government Treasury which recognizes that action is needed to overcome the current regulatory barriers to widespread use of crowdfunding in Australia. The discussion paper also analyzes the different policy options at hands, such the regulatory approach suggested by CAMAC back in June and New Zealand’s, which was put into effect last April, and is considered to be the most liberal in the world. The Government’s Treasury is currently seeking feedback from the public on its discussion paper on crowdfunding, which will probably constitute valuable input for local authorities’ future work on the topic, if the Government decides that further action is needed.
If, how and when the Australian legal framework for securities crowdfunding will change, it’s yet to be known. In the meantime the regional crowdfunding market is forming, with different business models emerging all over. And this increasing pool of stakeholders, together with SMEs and startups hungry for growth capital, will soon demand action.
References
Beatty, A., Lynch, B., Lyons, R. & Tam, B. (2014). Treasury Releases Discussion Paper on Crowd-Sourced Equity Funding. JD Spura Buiseness Advisor.
Alois, JD. (2014). Australia Financial System Inquiry Issues Final Report. Corwdfund Insider.
Image credit to: vagawi http://bit.ly/1y2CtRn
 | About the author - Irene Tordera 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. |
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