Feeds

Oz regulator says crowdfunding must obey financial rules

Analyst says ASIC "risks destroying" crowdfunding

Internet Security Threat Report 2014

Kickstarter kicked Australia's financial services regulator, the Australian Securities and Investment Commission (ASIC), has run its eye over crowdfunding services and decided some effectively issue securities under Australian law.

“Depending on the particular crowd funding arrangement, ASIC's view is that some types of crowd funding could involve offering or advertising a financial product, providing a financial service or fundraising through securities requiring a complying disclosure document,” ASIC Commissioner, Greg Tanzer said in a guidance note published today.

Those planning to offer crowdfunding services therefore need to lawyer up, the guidance suggests, lest they fail to meet the many obligations imposed on those who sell financial services products and securities. Failure to meet those obligations can mean colossal fines.

The Commission also offers some blunt-ish warnings for operators of crowdfunding sites, suggesting they protect consumers by conducting background checks on project creators, requiring them to provide details on just how and when they will deliver promised goods and services and holding investments in a trust fund.

Consumers are another target, with the Commission also publishing advice on things to consider before investing in crowdfunding. Perhaps ominously, that advice suggests using credit cards to make a crowdfunding payment may not be an entirely sensible idea.

The advice does at least end on a happy-ish note:

Supporting a project you really believe in can be a rewarding experience but you need to be careful someone isn’t taking advantage of your generosity.

Futurist Ross Dawson's first reaction to ASIC's guidance was that it represents bad news.

"ASIC is in great danger of stifling a thing that could be of great benefit to the economy," he said. "We do need regulation but this looks heavy handed." Dawson has since blogged about the ASIC guidance, and suggests ASIC "risks destroying" the fundraising technique if it makes viability assessments compulsory.®

Providing a secure and efficient Helpdesk

More from The Register

next story
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.