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ARTICLE · 16 SEPTEMBER 2012

Crowd Funding - The New Source Of Finance

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ASIC highlights some risks for operators of crowd funding websites and people participating in crowd funding projects.

AustraliaFinance and Banking
Alistair Jaque
Alistair Jaque
Swaab Author
Swaab Author
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ASIC has been monitoring the increased use of crowd funding in Australia for investment purposes.

'Crowd funding' involves the use of the internet and social media to raise funds in support of a specific project or business idea. Project sponsors typically receive some nominal reward in return for their funds.

On 14 August 2012, ASIC issued guidance to promoters of 'crowd funding' to clarify arrangements that may be regulated by ASIC under the Corporations Act 2001 (Corporations Act) and Australian Securities and Investments Commission Act 2001 (ASIC Act).

ASIC considers that certain crowd funding arrangements may involve:

  • offering or advertising a financial product, providing a financial service or fundraising through securities requiring a complying disclosure document; or

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