Federal Labor MP Ed Husic has called on the federal government to bring forward its plans to introduce crowdsourced equity funding legislation in Australia.
The latest federal budget included $7.8 million in funding over four years from 2015-2016 to enable the Australian Securities and Investments Commission to implement and monitor a crowdsourced equity funding regulatory framework.
Minister for Small Business Bruce Billson said in February that he plans to introduce legislation that would create such a framework during the spring session of Parliament.
Husic, the shadow parliamentary secretary to the shadow treasurer, praised the government for allocating money for the introduction and regulation of crowdsourced equity funding, but warned Australia is still a long way from having legislation in place.
“It’s good that the budget has set some money aside for this, but overall we’re still a long way off from having a solid CSEF framework in place,” Husic says.
“The cold reality is even the Abbott government admits it will be well into this year before any draft laws supporting CSEF are even introduced into the Parliament.
“And it’s been well over a year since the Abbott government received an independent ruling outlining how CSEF could work in Australia.”
That report, from the Corporations and Markets Advisory Committee, recommended Australia introduce legislation allowing retail investors to invest up to $10,000 a year via equity crowdfunding, across at least four startups.
“What’s been announced in the budget is a response to one recommendation made in this report – which called on the Australian Securities and Investments Commission to develop some standardised documents to help guide investors in seeking CSEF funding,” Husic says.
“Again, we call on the Abbott government to bring forward the plans to introduce crowdsourced equity funding into Australia, and we restate our genuine commitment to work constructively with them to achieve this.”
Billson told StartupSmart that there are no plans to limit the framework so it only applies to public companies and the government’s intention is still to introduce legislation by the spring session of parliament.
“On all fronts we are moving very purposefully and quite deliberately “ Billson says.
“It’s important to note while other jurisdictions were advancing crowdsourced equity funding, Labor didn’t get out of first gear on the topic while in government.
“We’re working with the sector and the startup community. Those that are involved in equity crowdfunding, and even those workarounds for what’s currently permissible in the crowdfunding space, and have been formulating a framework.
“I understand the encouragement but I’m also keen to move sure-footedly, in a thoughtful and consultative way. I’m very keen to get it right.”