New avenue for crowd funding

Eligible public companies now have a new option to raise capital following the licensing of Australia’s first crowd-fund sourcing intermediaries.

Seven companies have been issued with Australian Financial Services (AFS) licence authorisations to act as intermediaries in the provision of a crowd-sourced funding service.

Eligible public companies can now use the crowd-sourced funding regime to raise capital by making offers of ordinary shares to investors via the on-line platform of one of these intermediaries.

The crowd-sourced funding regime is designed to provide start-ups and small to medium sized companies with a new means to access capital to develop and grow.

Crowd-sourced funding offers are subject to fewer regulatory requirements than other forms of public fundraising.

ASIC Commissioner John Price says the development marks a significant milestone for crowd-sourced funding in Australia.

“ASIC has been assessing applications as a matter of priority, as suitable intermediaries needed to be licensed before fundraising under the new regime could commence,” he says.

“Intermediaries have an important gatekeeper role, which will be key to building and maintaining investor trust in crowd-sourced fundraising – so we are pleased to have now issued the first tranche of authorisations.”

The newly licensed intermediaries have now been added to ASIC’s register of AFS licensees.

ASIC’s free online search can be used by investors, potential crowd-sourced funders and others to confirm the authorisations held by individual licensees.

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