David Tink and Dillon Fuzi discuss ASIC licensing for the first Intermediaries under the new CSEF regime.
Almost a year after Corporations Amendment (Crowd-sourced Funding) 2016 was passed by both Houses of Parliament, Australian companies are now able to utilise Crowd Sourced Equity Funding (CSEF). The amendments to the Corporations Act 2001 from this legislation provide a framework for eligible companies to raise up to $5 million from investors each year through the use of CSEF (for further information on the CSEF model please see our previous article).
For the past three months, the Australian Securities and Investments Commission (ASIC) has been considering applications from prospective CSEF Intermediaries (Intermediaries) to receive an Australian Financial Services License which authorises the provision of a crowd-funding service.
On 11 January 2018, ASIC released a media release advising that it had licensed the first Intermediaries under the new CSEF regime.
The first Intermediaries to receive the licensing are: Big Start, Billfolda, Birchal Financial Services, Equitise, Global Funding Partners, IQX Investment Services and On-Market Bookbuilds.
Although the legislation was passed in March 2017 and the provisions came into effect in September 2017, there was still a major impediment to companies accessing CSEF by virtue of no Intermediaries having been licensed by ASIC.
One of the main features of CSEF is that offers will be conducted through appropriately licensed Intermediaries. The Intermediaries hold an important gatekeeping role in the CSEF offer process and facilitate the offer through publication of offer documentation, the provision of communication and application facilities and ensuring that appropriate systems are in place for investor protection.
With Intermediaries now licensed by ASIC, all of the requirements are in place to allow companies to utilise the CSEF regime.