Global legislation on equity crowdfunding

(aka the crowd moves in mysterious ways)

Whilst donation- and rewards-based crowdfunding are tipped to continue the steady growth observed in recent years, the nascent equity- and loans-based sectors are tipped to go ballistic in 2015 and continue the exponential growth exhibited in the past few years. This is predicated on the fact that more and more countries are coming on line with what we term ‘true’ equity crowdfunding - defined as private company investment available to all investors - and not just professional/institutional/accredited investors as was the case under erstwhile regulatory regimes.

Although Australia has recently (almost) announced via (two lines in) the 2015/16 Federal Budget that equity crowdfunding will be enabled (see here) – in a structure as yet unknown, at a time yet to be announced, in a galaxy…. we thought it appropriate to cast the net a bit wider and have a look at the world landscape in terms of countries that are far more advanced on equity crowdfunding legislation than Australia. (NB also correlates generally very positively with gender equality, paid parental leave, recycling, emissions reduction, anti-bogan proliferation treaty metrics.)

 
 

So where does all of this place Australia? Apart from well behind New Zealand… again (we REALLY need to start taking this seriously!). On the regulatory front, CrowdReady considers this as imminent equity crowdfunding. Funnily enough (not ha ha, but strangely), there was no announcement in the Federal Budget about what the equity crowdfunding legislation would look like.

Will the structure of Australian equity crowdfunding be as per the Corporations and Markets Advisory Committee (CAMAC) report recommendations or per the current New Zealand model (read: copy and paste NZ for Australia)? Surely, there’s been sufficient industry feedback (82 published submissions) on the two structures? The fact that the Federal Budget has allocated the Australian Securities and Investments Commission (ASIC) an equity crowdfunding budget for the next four years ought to be encouraging, so we’ll forge on assuming it’s all systems go… imminently, in the fullness of time, at the appropriate juncture.

In the meantime it’s a wait and see here at CrowdReady although we do have our own thoughts (see Treasury submission) and expectations on timing (see timeline).

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