This article was written by Stephen Timm for Venture Burn and can be found here.
South Africa’s Financial Services Board (FSB) last month revealed to Ventureburn that it had set a date of 30 June by which it plans to rule on whether to craft specific rules or not for equity crowdfunding.
Since then the FSB has received a number of calls from interested parties who mistakenly believe the authority is about to release crowdfunding legislation.
In a Q&A with Ventureburn, FSB deputy executive officer for financial advisory & intermediary services Caroline da Silva explains what the deadline is all about and details the FSB’s current approach to crowdfunding legislation.
Ventureburn: What is the June 30 deadline set by the FSB all about?
Caroline Da Silva: The 30th of June is a target date in terms our internal project plan. It is a deadline we have given to ourselves to address all the remaining issues on the project before communicating our position to the industry.
The finalisation of this project is dependent on factors that are outside our control and may result in us meeting or not meeting our target date.
VB: The FSB completed a report looking at equity crowdfunding regulation. When was it completed? What did the report broadly contain?
CDS: The research we conducted was aimed at giving us insight on how crowdfunding is regulated in other jurisdictions and what legislation would govern crowdfunding activities in SA.
VB: Is the FSB studying or planning to study equity crowdfunding regimes of any particular countries?
CDS: We looked at crowdfunding activities in the Netherlands and other European countries, India, Kenya, New Zealand and the US.
VB: What consultations has the FSB held so far and with which industry groups?
CDS: We have engaged the Africa Crowdfunding Association.
VB: Is the FSB allowing Wealth Migrate and ThundaFund to trial equity crowdfunding under a special dispensation?
CDS: No, the FSB has not allowed anyone, platform or entity to trial equity crowdfunding.
VB: What steps will be taken now by the FSB over the coming months to decide whether SA needs regulations on equity crowdfunding or not?
CDS: The final phase of the project would include the following:
(1) A demonstration of crowdfunding business models by members of the Africa Crowdfunding Association.
(2) Consideration on whether we should test equity crowdfunding in a sandbox environment.
The FSB anticipates that it would be in a position to communicate progress in this regard to the industry should there not be a need for more consultation with affected stakeholders.