On 3 December 2105 legislation was introduced into Parliament to provide a framework for crowd-sourced equity funding (CSEF), encouraging Australians to innovate and invest.
According to the Assistant Treasurer Media Release “CSEF or crowd funding is an emerging way for start-ups and early stage businesses to access the funding and investors they need, while maintaining adequate protections for retail investors who share in the risks and successes of these businesses”.
► The legislation will allow unlisted public companies with less than $5 million in assets and less than $5 million in annual turnover to raise up to $5 million in funds in any 12 month period.
► Companies that become an unlisted company in order to access crowd-sourced equity funding will receive a holiday of up to five years from some reporting and governance requirements.
► While investors will be able to invest an unlimited sum in crowdfunding, there will be a cap of $10,000 per issuer per 12-month period to ensure that mum and dad investors are not exposed to excessive risks.
► Regulations to support the framework for crowd-sourced equity funding will be released for consultation shortly. The Government will also consult on options to facilitate crowd-sourced debt funding in 2016.
The Government’s Innovation Statement is planned for released next week. The document aims to overhaul Australia’s innovation ecosystem, covering science and research, financing, government procurement, commercialization and talent.