The federal government’s long-awaited equity crowdfunding reforms are set to be passed by Parliament this week, a year after they were first introduced.
The Corporations Amendment (Crowd-sourced Funding for Proprietary Companies) Bill 2017 extends equity crowdfunding to private Australian companies. Until now, the scheme required companies to convert to unlisted public companies in order to take part.
The amendment is listed at number seven on the Senate notice paper and, with bipartisan support, will be passed this week.
It has taken the federal government a year to get the legislation in place since it was first introduced to the lower house in September last year, despite the amendment enjoying broad bipartisan support.
With a six-month royal assent period to wait through after the bill is passed, the scheme won’t be available to private companies until March next, although a Labor amendment is seeking to reduce this wait time to four months.
The Opposition had previously secured support for this amendment, but believed the legislation would be passed before the Easter break.
Now-Prime Minister Scott Morrison has said the legislation is a “game-changer” for local tech companies and startups and is an “example of the government getting on with the job”.
Mr Morrison led the legislation in his former role as Treasurer, labelling it as an important reform for the FinTech sector. After taking over as prime minister last month, Mr Morrison was replaced as Treasurer by deputy Liberal leader Josh Frydenberg.
Mr Frydenberg’s deputy, Stuart Roberts, has been handed responsibilities for the government’s FinTech policies.
The extended delays in passing the legislation has been criticised by the Opposition and members of the FinTech sector, with shadow digital economy minister labelling the process as “farcical”.
“They say it’s a game-changer, a boost for innovation, and all the cliches get recycled for the purpose of a ministerial speech or a press release, but as is often the case with the Coalition, it takes its sweet time to create and produce outcomes,” Mr Husic told InnovationAus.com in February.
“How many opportunities did we miss out on because those opposite wanted the headline rather than the substance?”
The new regime is also likely to be somewhat obsolete before it is even introduced thanks to the rise of initial coin offerings as a fundraising method, Mr Husic said.