By Crowdfund Vibe Staff Writers
In August this year the New Zealand Parliament passed a major law reform for regulating New Zealand’s financial markets. This new law will include one of the first regimes in the world to licence crowdfunding.
“The passage of the Financial Markets Conduct (FMC) Bill is a significant milestone and the result of a comprehensive review of securities law. It addresses the lessons from the global financial crisis and the failure of finance companies and also picks up many of the recommendations of the Capital Market Development Taskforce” Mr Craig Foss, New Zealand’s Minister of Commerce, stated when the law passed.
“This new law will provide better information and protections for investors and clearer rules and options for companies looking to raise capital. It plays an important role in the Government’s Business Growth Agenda to build New Zealand’s capital markets and drive business growth, exports and jobs”, he explained.
The new law rewrites many of the rules for how financial products and financial services are offered to the public and how they are governed and operated.
It will permit new forms of capital-raising, such as peer-to-peer lending and crowdfunding. These will be authorised through a licensing regime which will be available from 1 April 2014. The detail of the licensing system will be set out in regulations.
The NZ Financial Markets Authority is responsible for implementing the changes and will consult on new licensing frameworks and other key operational changes. An exposure draft of the crowdfunding regime and other regulations to support the Bill will be released for consultation in October.
“The FMC Bill is the largest Bill in a suite of reforms in this sector, sitting alongside the Financial Advisors Act and The Financial Reporting Bill,” stated Mr Foss. The Minister singled out the pending authorisation of crowdfunding and peer-to-peer lending in several tweets to promote the new law.