Snowball Effect has announced that it has been granted its license from the Financial Markets Authority (FMA). The news of the license arrives at the perfect time for the budding platform. AltFi News reported only a week ago that Snowball Effect would be launching the first equity crowdfunding campaign in New Zealand for e-commerce site Rippr Crowd Loyalty. Snowball Effect is currently pondering an official launch date around mid-August, with over 1,000 registered investors raring to make use of the new platform.
New Zealand’s Financial Markets Conduct Act took effect on April 1st earlier this year – the first lending license being awarded to Harmoney and PledgeMe. Several other Kiwi platforms await licensing from the FMA. A guideline published by the regulatory body states minimum standards to which a funding portal must adhere if it is to receive legal recognition. Companies within New Zealand are authorised to raise up to $2million in any twelve month period using crowdfunding.
Commerce Minister of New Zealand Craig Foss commented on the country’s first crowdfunding licenses:
"New Zealand needs more innovative businesses to increase economic growth - this is one way for early-stage and growth companies to source the risk capital they need to flourish."
"These initiatives are part of the Government’s Business Growth Agenda to build New Zealand’s capital markets and drive business growth, exports and jobs."
"We are leading the way in the Asia-Pacific region with a robust framework that will give these services the best chance of succeeding."
Snowball Effect played an active role in the development of crowdfunding regulations within the country as they regularly issued feedback to the FMA and Ministry of Business, Innovation and Employment. The correspondence between regulatory officials and platforms is allowing the alternative finance sector in NZ to make encouraging strides.