Crowdfunding: Recent International Developments and Analysis of Its Compatibility with Australia's Existing Regulatory Framework
13 Pages Posted: 13 Sep 2013
Date Written: July 5, 2013
Crowdfunding has recently emerged as an alternative means of raising capital. This has the potential to challenge the existing regulatory framework for capital raisings and securities regulation, and has resulted in different responses from regulators in the European Union and the United States. However, there has been only a limited response by Australian regulators to this emerging industry. This paper considers the emergence of crowdfunding through the convergence of the two distinct concepts of crowdsourcing and microfinance. The two crowdfunding models are considered (distinguished by what contributors are promised in return for their contribution) and the Australian regulatory issues associated with each are identified. Finally, an assessment of whether Australia’s current regulatory framework is compatible with crowdfunding will be made, with recommendations for regulatory action.
Keywords: crowdfunding, crowd funding, securities, regulation, Australia, micro finance, crowd sourcing, crowd sourcing
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