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MALCOLM SAYS, FOLLOW NEW ZEALAND |
Government bureaucracy has been blamed by Communications Minister Malcolm Turnbull the ongoing delay of legislation to fully allow equity crowdfunding for start-up businesses, and said new rules will be introduced by the end of the year that could reflect New Zealand's scheme.
Crowdsourced equity fundraising is currently legal in Australia, but considerable regulatory and associated compliance hurdles mean it is rarely undertaken by young technology companies that require growth capital.
"It's about balancing the need for consumer protection versus the extraordinary aggregation power of the internet," Mr Turnbull said.
In a discussion paper launched in December last year, the Coalition identified three options:
However The New Zealand model offers a somewhat easier compliance load for new companies. There is no requirement for ongoing financial audits but a business plan to be submit by companies, which is the only requirement. Prior to a company's funding raise in New Zealand, the financial markets authority checks the company has not engaged in false and misleading conduct. A $25,000 investment limit per person will probably be set.
Mr Turnbull said he favoured the New Zealand model over the existing CAMAC plan.
"I'm very attracted to just taking the New Zealand law, deleting New Zealand and inserting Australia. Imitation is the sincerest form of flattery and I'm happy to flatter the Kiwis as much as we can on this one," he said.
The government planned to introduce fresh legislation to parliament by the end of the year. And, it could even be introduced as early as August.
Definitely changes to be made…
Crowdsourced equity fundraising is currently legal in Australia, but considerable regulatory and associated compliance hurdles mean it is rarely undertaken by young technology companies that require growth capital.
"It's about balancing the need for consumer protection versus the extraordinary aggregation power of the internet," Mr Turnbull said.
In a discussion paper launched in December last year, the Coalition identified three options:
- adopting the CAMAC model
- adopting a model similar to New Zealand
- making no changes
However The New Zealand model offers a somewhat easier compliance load for new companies. There is no requirement for ongoing financial audits but a business plan to be submit by companies, which is the only requirement. Prior to a company's funding raise in New Zealand, the financial markets authority checks the company has not engaged in false and misleading conduct. A $25,000 investment limit per person will probably be set.
Mr Turnbull said he favoured the New Zealand model over the existing CAMAC plan.
"I'm very attracted to just taking the New Zealand law, deleting New Zealand and inserting Australia. Imitation is the sincerest form of flattery and I'm happy to flatter the Kiwis as much as we can on this one," he said.
The government planned to introduce fresh legislation to parliament by the end of the year. And, it could even be introduced as early as August.
Definitely changes to be made…