The Government has released exposure draft regulations providing further detail on the extension of the crowd-sourced funding (CSF) framework to proprietary companies. This is the next step in enabling proprietary companies to access equity crowdfunding, and follows the legislation introduced to the Parliament on 14 September 2017.
The draft regulations also make refinements to the existing CSF regime for public companies, to add flexibility to the structure and contents of CSF offer documents in addition to requiring disclosure relevant to the proprietary companies, and make other minor changes to clarify the operation of the existing rules.
In relation to proprietary companies, the draft regulations provide that the exemption from the takeover rules for CSF proprietary companies will be limited to companies that are still eligible to make a CSF offer, as it would be inappropriate for proprietary companies that out-grow the CSF framework to continue to be exempt from the takeover rules in perpetuity. The draft regulations also modify the unsolicited offer provisions in the Corporations Act, which apply to all companies, to make these more flexible for proprietary companies with CSF shareholders.
All interested parties are invited to lodge a submission by Friday 2 February 2018. More information on the existing CSEF regime for public companies is available on the Australian Securities & Investments Commission website.