Introduction
In 2017, the Blanket Law numbered 7061 had introduced equity
crowdfunding into the Capital Markets Law, as an alternative way to
raise capital alongside formal offerings and granted the CMB
authority to issue more detailed secondary legislation.
The Capital Markets Board (the "CMB")
has now opened a draft of its Communiqué III-35/A.1 on
Equity Crowdfunding (the "Draft
Communiqué") for public comment and
consultation.
Equity Crowdfunding
In general, crowdfunding is an alternative financing method
typically used by start-ups and entrepreneurs to raise small
amounts of capital from a large and diverse investor base by
leveraging the wide reach of social media and other web-based
platforms. In equity-based crowd-funding, investors receive equity
interest in the business or venture being funded.
