Project sponsors may seek to conduct crowdfunding operations that are prepared by a director or employee of their own company. This means that the project sponsor and crowdfunding intermediary are one and the same entity. In this case, there is a risk of biased representation of the company’s financial situation and prospects. To mitigate this risk, the ACfA Label Framework provides for the special case of a registered Crowdfunding Intermediary – Own Account. In addition to complying with the ACfA Label Framework and submitting the DOC 5-2019: Crowdfunding Intermediary Application File, these intermediaries must follow additional rules:
- The registered Crowdfunding Intermediary – Own Account ensures that the crowdfunding operation conducted for its own account mentions clearly that the information provided in DOC 6-2019: Project Sponsor Prospectus has been prepared by a Crowdfunding Intermediary – Own Account.
- The company’s audited annual financial statements must be made available to potential crowdinvestors, and must have been prepared by an independent accountant that holds the requisite industry qualification.
- The registered Crowdfunding Intermediary – Own Account ensures that the rights of minority shareholders are guaranteed and adequately represented under the resulting governance structures.
