A timely update from K&L Gates on reducing the red tape on crowd funding. With Financial Services innovations including crowd funding & P2P lending, it is important to remember the importance of risk management and investor protection for aspiring investors. Raising $5million in a year under the CSEF seems like a high threshold, but companies which raise over $1million will still be required to provide audited accounts for investors.
Should the proposals be enacted this will be good news for the exciting FinTech sector as well as entrepreneurs in other sectors.
On 4 August 2015, the Treasury of the Australian Government released a consultation paper, facilitating crowd-sourced equity funding and reducing compliance costs (Consultation Paper). This follows the previous discussion paper released by treasury in December 2014. The Consultation Paper outlines key elements of the government's crowd-sourced equity funding (CSEF) framework for public companies. Further details of the government's CSEF framework for public companies will be available in draft legislation released for public comment later in the year. The introduction of legislation to parliament is expected to follow in the Spring sitting period. The Consultation Paper also seeks feedback on whether proprietary companies should be able to access CSEF and outlines a potential model.