Only a few weeks ago the New Zealand financial regulator, the Financial Market Authority (FMA), awarded its first peer-to-peer lending license to lending platform Harmoney. Alternative finance certainly appears to be flourishing within New Zealand post regulation, as equity crowdfunding platform Snowball Effect looks set to hold New Zealand’s first ever equity crowdfunding campaign at the end of this month.
Rippr Crowd Loyalty, a rewards based e-commerce website established in 2010, announced their equity crowdfunding campaign launch on Twitter. It is set to begin on 28th July 2014 on the crowdfunding platform Snowball Effect.
According to the platform’s website, Snowball Effect is currently working through the FMA licensing process. We expect to see Snowball Effect fully licensed and regulated by the FMA within the coming week as Rippr’s campaign begins in exactly one week’s time.
New Zealand’s FMA Conduct Act took effect on April 1st earlier this year, regulating both equity crowdfunding and peer to peer lending. We are yet to see equity crowdfunding regulation in the US but it has long been talked about and the speed with which platforms in New Zealand have reacted to regulatory approval surely indicates that, once the SEC regulation arrives, we will see rapid growth within the US Equity crowdfunding sector.
The New Zealand FMA Conduct Act enables companies to raise up to $2 million in any twelve month period without having to issue an investment statement. Snowball Effect aims to become New Zealand’s leading equity crowdfunding platform, stating on their website:
“Our vision is a New Zealand economy fuelled by emerging businesses, backed by everyday Kiwi investors.”
“We are excited about how equity crowdfunding can improve access to finance for Kiwi businesses and make a lasting contribution to the New Zealand economy.”
Snowball Effect played an active role in the development of crowdfunding regulations in New Zealand, regularly issuing feedback to the FMA and Ministry of Business, Innovation and Employment.
