UK-based crowdfunding site Crowdcube says it is now authorized by the UK’s Financial Services Authority (FSA), making it the world’s first regulated equity crowdfunding site.
Crowdcube said Monday that the authorization makes it the only regulated equity crowdfunding platform where investors can take equity in British businesses. Its investors will now also have access to that country’s dispute resolution scheme, the Financial Ombudsman Service (FOS); and, access to claim compensation from the Financial Services Compensation Scheme (FSCS).
The firm says it applied for FSA authorization in 2011. “We’re delighted to be the first authorized crowdfunding platform that allows investors to become direct shareholders in UK businesses. Our authorization and the additional investor protection it affords will increase satisfaction and confidence, which is at the heart of our business and will be crucial to our long term success in the UK,” said Darren Westlake, co-founder and CEO of Crowdcube.
“In the last two years we have pioneered and led the equity crowdfunding market which is set to boom in 2013 and beyond. We want to continue to be first choice for entrepreneurs seeking equity finance and for people looking to invest in start-up and early stage businesses in the UK,” he added.
The firm reports that it has already raised over £5 million for UK businesses, and that more than 28,000 investors have registered on its website since its launch in February 2011.
In Canada, regulators in several provinces are considering the implications of allowing crowdfunding here too, and the Ontario Securities Commission (OSC) is currently consulting on the possibility of adopting a specific crowdfunding exemption. U.S. regulators were supposed to have developed new crowdfunding rules by the end of 2012, but that has yet to happen.
More changes for exempt market
U.S. regulators were supposed to have developed new crowdfunding rules by the end of 2012, but that has yet to happen.