The Institute of Public Accountants (IPA) has welcomed the proposed legislation to extend crowd-sourced funding to proprietary companies as it will help bridge the ‘capital gap’ faced by many young and emerging start-ups.
However, the IPA warned that the legislation added to the volume of work to the already ‘over-worked regulator’, the Australian Securities and Investments Commission (ASIC).
IPA chief executive, Andrew Conway, said: “ASIC will need to continue to monitor the activities of companies involved in crowd-sourcing funding, as well as activities of their intermediaries and their offer platforms”.
Conway said he was pleased to see the reduced disclosure and compliance requirements, including those relating to the holding of an annual generally meeting, being able to post reports online, and removing the need for an auditor unless the offer was greater than $1 million.
"This will relieve unlisted public companies from significant regulatory burdens over a five year period. However, we are concerned about what happens after the initial five year period,” he said.
"The proposed amendments will bring significant benefits that flow from bridging the 'capital gap' faced by many young and emerging start-ups.
"Australia has a relatively poor global record of commercialising innovation and lags behind most advanced economies on this matter so addressing the lack of funding for start-ups is critical. It is these innovative firms that drive economic transformation, and which are much needed to respond to a dynamic, global environment.”
Conway said the legislation would bring Australia into line with other countries that have already adopted and embraced similar laws including the US, UK, Canada, New Zealand, and many European countries.