ASIC has announced that from 29 September 2017, the new crowd-sourced funding (CSF) regime will come into effect and ASIC will begin accepting licence applications from CSF intermediaries.
Separately, the Government is proceeding with its plan to extend the regime to proprietary companies.
Proprietary companies
The Corporations Amendment (Crowd-sourced Funding for Proprietary Companies) Bill 2017 has been introduced into the House of Representatives.
This Bill, if passed, extends the original CSF regime to enable proprietary companies to access CSF without transitioning to public company status provided they satisfy .
The special investor protection provisions that will apply to proprietary companies accessing the CSF regime include requirements to:
• maintain a minimum of two directors;
• prepare annual financial and directors’ reports in accordance with accounting standards;
• have their financial reports audited once they raise$3 million or more from CSF offers; and
• comply with the existing related party transaction rules that apply to public companies.
The amendments to extend the CSF regime to proprietary companies will take effect six months after Royal Assent.
ASIC Regulatory Guides
ASIC has released 2 guides:
Regulatory Guide 261 Crowd-sourced funding: Guide for public companies (RG 261) to assist companies seeking to raise funds through CSF to understand and comply with their obligations in the new regime, particularly as many of these companies will not have experience in making public offers of their shares. ASIC has also published a template CSF offer document to help companies prepare their CSF offers.
Regulatory Guide 262 Crowd-sourced funding: Guide for intermediaries (RG 262) will assist crowd funding platform operators (‘intermediaries’) seeking to provide a crowd-funding service, particularly as this is a new type of financial service and there are unique gatekeeper obligations for operating platforms for CSF offers.
Licence applications
Applications under the original regime will able to be submitted via the existing ASIC electronic ‘eLicensing’ portal.
ASIC will consider CSF applications lodged between 29 September 2017 and 27 October 2017 in batches in conjunction with other CSF applications lodged during this period that it considers have the prospect of being positively assessed within a similar timeframe. It will progress the applications within in each relevant batch to conclusion at broadly the same time.
Applications which are lodged later in the period, are incomplete, inadequate or do not contain mandatory information and supporting proof documentation may be refused for lodgement or placed in batches for decision after batches of applications that are lodged earlier and are complete.
Applications lodged after 27 October 2017 will be progressed as soon as possible.
