The model of crowd-sourced funding in Australia has passed a watershed moment as a result of moves by the country's financial regulator.

The Australian Securities and Investments Commission has licensed the first tranche of intermediaries under its new crowd-sourced funding regime.

Seven companies have been issued with Australian Financial Service licence authorisations to act as intermediaries able to provide a crowd-sourced funding service. Public companies will now be able to use the CSF regime to raise capital by making offers of ordinary shares to investors through the on-line platforms of these intermediaries.

This is a watershed moment for crowd-sourced funding in Australia. The CSF regime is designed to provide start-ups and small to medium sized companies with a new means to access capital to develop and grow, and to provide HNW investors with another avenue for their investments. CSF offers are subject to fewer regulatory requirements than other forms of public fundraising.

ASIC encourages both CSF investors and wealth managers who act on their behalf to check whether their intermediaries hold AFS licences with the correct authorisation to provide CSF services.

In September the Corporations Amendment (Crowd-sourced Funding) Act 2017 and associated regulations came into effect. The regime aims to reduce the regulatory burden on smaller companies. To this end, ASIC has published Regulatory Guide 261 on the subject of crowd-sourced funding. It has also published a template CSF offer document to help companies prepare their CSF offers.