Skip to content

  • Home
  • COVID-19 Guide
  • COVID-19 AV library
  • Client results
  • Expertise
  • News & Insights
  • People
  • Our DNA
  • Inclusion and Diversity
  • Join us
  • Contact Us
Home / NEWS & INSIGHTS / Insight / New crowd-sourced funding regime
Insight 22 September 2017

New crowd-sourced funding regime

The new crowd-sourced funding (CSF) regime will officially come into effect at the end of this month.

As detailed in one of our earlier posts, the CSF regime allows eligible companies to make offers of fully paid ordinary shares to investors through a platform which must be operated by an intermediary who holds an Australian financial services licence from ASIC.

1. So what happens now?

To facilitate implementation of the CSF regime as soon as possible, ASIC will begin accepting applications from potential CSF intermediaries from 29 September 2017.

In the meantime, if you are considering taking advantage of the CSF regime, you should consider what (if anything) you need to do to ensure you are eligible to do so.

2. How do I know if I am eligible?

The CSF regime is currently only available to Australian unlisted public companies with less than $25 million in gross assets and $25 million in annual turnover.

At the time of writing, a further bill has also been introduced to parliament which proposes to:

  • expand the eligibility for the CSF regime to proprietary companies that meet certain eligibility requirements including:
    • maintaining a minimum of two directors
    • preparing annual financial and directors’ reports in accordance with accounting standards
    • ensuring their financial reports are audited once they raise $3 million or more under the CSF regime, and
    • complying with the existing related party transaction rules that apply to public companies.
  • provide that proprietary companies with shareholders who acquire shares through a CSF offer are not subject to takeovers rules
  • add special investor protection provisions for proprietary companies accessing the CSF regime, and
  • remove the temporary corporate governance concessions detailed below.

Assuming the bill is passed, these changes will take effect six months after the bill receives royal assent. Until then, the current legislation provides corporate governance concessions to new public companies or companies that have recently become public where the company has been established or converted for the purpose of utilising the CSF regime. ASIC has released an updated Form 206 (Application for change of company type) which allows an existing company to be converted specifically to enable it to take advantage of the new CSF regime.

3. How much money will I be able to raise?

Eligible companies can raise up to $5 million, with a limited investment of $10,000 per investor, in any 12 month period.

However, you should also be aware that, in making an offer under the CSF regime:

  • you will need to use a specific offer document that complies with the CSF legislation
  • the offer can only remain open for a maximum of three months
  • the offer can only be published on one platform
  • you can only have one offer open at any one time, and
  • you may also make an offer relating to ordinary shares in the company outside of the CSF regime (bearing in mind the $5 million annual cap).

This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.

About the authors

  • Alex Hutchens

    Partner
  • Adrian Smith

    Partner
  • Belinda Breakspear

    Partner

In other news

McR strengthens the Construction and Infrastructure team in Brisbane

McCullough Robertson strengthens its National Construction and Infrastructure team with key Partner hire in Brisbane

27 January 2021News

New Industrial Relations Laws – What it means for you

22 December 2020Insight

Payment Times Reporting Scheme

21 December 2020Insight

Australian Government proposes new broadcaster’s licence and forced investment quotas in Media Reform Green Paper

14 December 2020Insight

VIEW ALL NEWS & INSIGHTS

BRISBANE

Level 11, 66 Eagle Street
Brisbane QLD 4000
GPO Box 1855
Brisbane QLD 4001
Tel +61 7 3233 8888
Fax +61 7 3229 9949

 

GET IN TOUCH

Contact form

We handle your personal information in accordance with our privacy policy.

sydney

Level 32, MLC Centre
19 Martin Place
Sydney NSW 2000
GPO Box 462
Sydney NSW 2001

Tel +61 2 8241 5600
Fax +61 2 8241 5699

 

GET IN TOUCH

Contact form


We handle your personal information in accordance with our privacy policy.

melbourne

Level 27, 101 Collins Street
Melbourne VIC 3000
GPO Box 2924
Melbourne VIC 3001

Tel +61 3 9067 3100
Fax +61 3 9067 3199

 

GET IN TOUCH

Contact form

We handle your personal information in accordance with our privacy policy.

follow us

CLIENT LOGIN

newcastle

Level 2, 16 Telford Street
Newcastle NSW 2300
PO Box 394
Newcastle NSW 2300

Tel +61 2 4914 6900
Fax +61 2 4914 6999

 

GET IN TOUCH

Contact form


We handle your personal information in accordance with our privacy policy.

canberra

Level 9, 2 Phillip Law Street
Canberra ACT 2601

Tel +61 2 6243 3699
Fax +61 2 8241 5699

 

GET IN TOUCH

Contact form


We handle your personal information in accordance with our privacy policy.

© 2017 McCullough Robertson. Site map Disclaimer Privacy Policy Credit Reporting Policy

X