START-UPS Alert: Framework for crowd sourced equity funding for public companies released

10 September 2015


This client alert deals with the key elements of the Government’s crowd sourced equity funding framework for public companies as released in the Government’s Consultation Paper “Facilitating crowd sourced equity funding and reducing compliance costs for small businesses” dated August 2015. Draft legislation will be introduced for public comment later in the year and the introduction of legislation to Parliament is expected by the end of the year.

What is crowd sourced equity funding?

Crowd sourced equity funding (CSEF) is a form of fundraising whereby a large number of individuals can make small equity investments in a company.

Key elements of CSEF framework for public companies

The CSEF framework regulates issuers, intermediaries and investors. Broadly the key elements are:

In addition to announcing the Government’s CSEF policy for public companies the Consultation Paper also:

  • seeks feedback on whether proprietary companies should also be able to access CSEF and, if so, the best regulatory approach; and
  • examines the regulatory framework for small proprietary companies under the Corporations Act (Cth) 2001 to identify ways to reduce compliance costs for such companies.

The Consultation Paper does not seek any feedback on the framework for CSEF for public companies. The Government has stated its intention to move forward with the public company framework regardless of the outcome of the Consultation Paper and whether CSEF is made available to proprietary companies. The consultation period closed on Monday, 31 August 2015.

For more information, please contact:

Gaynor Tracey | Partner | +61 2 8248 5853 |

Madeleine Kulakauskas | Senior Associate | +61 2 8248 3472 |