As we have said before here, The Australian Small Scale Offerings Board, are spot on with their line on regulation and investor protection.
Here's what they said about the new Australian ECf regulations -
“ASSOB has now had a chance to fully digest the legislation and has a completely different view to most of the industry.
“We believe it achieves its twin goals of protecting both investors and companies, and, at the same time, will allow significant capital to be unlocked to help drive a considerably under-capitalised sector of the economy.
“The key points of difference with the legislation’s critics, are, in our opinion:
“The cost of converting to a limited entity, at $550, is neither expensive nor complicated – despite what is being said. Requiring three directors is simply good governance as it sets up small businesses for the long term by encouraging them to enlist skills outside their businesses that will help critically analyse their business models.
“An independent auditor is critical. Although relatively expensive, independent auditing gives investors the necessary peace of mind, especially where companies won’t be cash-flow positive for several years.
“The move by the Government to protect investors is to be fully commended. In our opinion it’s not unreasonable for investors in a speculative venture to have access to the board and management at an AGM; to have access to accurate financial accounts; to receive quarterly disclosure statements; to require the company to file their documents with ASIC, including financial reports; and for the company constitution to protect the investor. These protections should be par for the course.
“Responsible crowd funding platforms are vitally necessary. Having platforms migrate towards having an AFSL is an obvious prerequisite as only qualified and responsible advisors should be allowed to exhibit investment opportunities to the public.''
Any comments from the FCA??