Equity Crowdfunding in New Zealand: A Progressive Experiment

Victoria University of Wellington, Centre for Accounting, Governance and Taxation Research School of Accounting and Commercial Law Working Paper No. 103

29 Pages Posted: 29 Sep 2016

See all articles by Trish Keeper

Trish Keeper

Victoria University of Wellington - Te Herenga Waka

Date Written: September 21, 2016

Abstract

When the first tranche of provisions of the Financial Markets Conduct Act 2013 (‘the FMC Act’) came into force on 1 April 2014, a new licensing regime for crowdfunding service providers (‘CSPs’) was introduced into New Zealand law – one of the most progressive and innovative operating in the world today. The regime works on the basis that an offer of financial products to an investor does not require the FMC Act's standard disclosure documents necessary for an initial public offering, if the offer of financial products is by, or through, a licensed CSP and the offer is under the market service licence held by the CSP.

The paper starts with an overview of the nature of equity crowdfunding and how it implicates securities law. It then briefly outlines how this activity was regulated in New Zealand previously and discusses how the new regulatory framework operates. The final part of the paper describes how the crowdfunding markets have developed in the last two years and identifies future developments and potential threats to the operation of New Zealand’s crowdfunding regime.

Keywords: Crowd Funding, Securities Law, New Zealand

JEL Classification: K22

Suggested Citation

Keeper, Trish, Equity Crowdfunding in New Zealand: A Progressive Experiment (September 21, 2016). Victoria University of Wellington, Centre for Accounting, Governance and Taxation Research School of Accounting and Commercial Law Working Paper No. 103, Available at SSRN: https://ssrn.com/abstract=2844948 or http://dx.doi.org/10.2139/ssrn.2844948

Trish Keeper (Contact Author)

Victoria University of Wellington - Te Herenga Waka ( email )

P.O. Box 600
Wellington, 6140
New Zealand

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