This post was first published on the Getting Results From Crowds book website.
Today the Australian Securities & Investment Commission (ASIC) issued a wide-ranging guidance on crowd funding.
The guidance in essence recognizes crowdfunding and clarifies the current legislation that applies to the area. It notes that if crowdfunding activities “produce financial benefits” then they are regulated under the Corporations Act and will require a disclosure document.
In the case of crowdfunding being effectively “pre-purchase arrangement of a product or a service”, then it will be regulated by the Competition and Consumer Act, that applies to all retail sales.
These points were pretty obvious, so this part of the guidance simply clarifies the relevant legislation for those involved in the space.
Where the guidance gets interesting is on what they expect from crowdfunding platforms in helping to manage risks: