The Turnbull Government is progressing Australia’s first framework for crowd-sourced equity funding (CSEF) with the Bill passing through the House of Representatives today, Minister for Small Business and Assistant Treasurer the Hon Kelly O’Dwyer, and Minister for Industry, Innovation and Science the Hon Christopher Pyne said.
“The intent of this Bill is to assist start-ups and other small businesses that may have difficulty accessing equity funding due to the costs of disclosure and other requirements, while protecting mum and dad investors,” Minister O’Dwyer said.
“The Government crafted this Bill after extensive stakeholder consultation and considering international models.
“Australia’s new CSEF model is internationally competitive with the issuers able to fundraise up to $5 million each year, which is higher than the US and New Zealand cap,” Minister O’Dwyer said.
Australia’s new model:
- allows unlisted public companies with less than $5 million in assets and less than $5 million in annual turnover;
- sets an investor cap of $10,000 per issuance per 12-month period (this is higher than the average in New Zealand and the UK);
- provides a five year holiday from some reporting and governance requirements for unlisted public companies; and
- will protect investors with a cooling off period of five days after making an investment (this is shorter than Italy and in some cases in the US).
“This CSEF framework is a key priority of the Turnbull Government’s National Innovation and Science Agenda, encouraging Australians to innovate and invest,” Minister Pyne said.
Other key announcements of the NISA agenda include reforming our insolvency laws, which currently put too much focus on penalising and stigmatising business failure. This Bill passed the House today.
We are providing new tax breaks for early stage investors in innovative start-ups, and making existing Employee Share Scheme rules more user-friendly to help owners to attract and retain quality staff.