There has been recent news coverage on how “crowdfunding” is taking off globally as a means of raising money from investors in relatively small amounts. The US Securities and Exchange Commission has released a set of proposed rules for exempting certain crowdfunding activities from registration requirements. In Hong Kong, some crowdfunding sites are generating interest. To date the SFC has not made a public statement about the trend. Operators of crowdfunding businesses need to consider all the relevant regulatory implications, including:
This list is not exhaustive and other regulatory issues need to be considered. Crowdfunding promoters should seek formal legal advice before commencing operations in Hong Kong.