The federal government appears set to adopt its first recommendation from the financial system inquiry that would pave the way for equity crowdfunding laws, The Australian Financial Review reports:
According to the newspaper, Minister for Small Business Bruce Billson told a group of 20 startups yesterday that it is the government’s “clear goal” to have crowdfunding legislation put before the parliament in the spring session.
Crowdfunding is a form of financing that sees ventures or businesses funded by small amounts of money from a variety of investors, the ‘crowd’, through an online platform.
The Financial System Inquiry, led by former Commonwealth Bank of Australia chief executive David Murray, threw its support behind the crowdfunding regulation proposal in December.
At the time, the FSI emphasised the problems small businesses have securing financing, especially at competitive rates, with traditional lenders. Crowdfunding would provide another finance stream for SMEs and help drive down the overall cost of borrowing for small business.
The system currently under consideration would allow securities-based crowdfunding, which would allow potentially large public offers.