Crowd control: regulating crowd sourced equity funding in Australia, part I

Key Points:

CAMAC's discussion paper on CSEF put forward a whole spectrum of options, and its final report is eagerly awaited.

CAMAC is shortly expected to report on possible reforms to facilitate crowd sourced equity funding (CSEF) in Australia¹.

Any such proposals will take a while to get on the statute books, so this article provides a brief background to the current state of the law in Australia – and how this topic is being addressed in the United States, the United Kingdom and New Zealand.

When the CAMAC report is released, we will publish a further Insights article analysing the proposed changes.

What is crowd sourced equity funding or "CSEF"?

CSEF involves offering equity securities to the public (usually in small parcels) through internet-based intermediary platforms. This allows small companies to raise funds from, and issue securities to, a large pool of potential investors².