Abstract
In recent years, crowdfunding, an innovative method of raising capital, has emerged. That an increasing trend of small and medium enterprises (SMEs) that may have difficulty accessing equity funding due to the costs of disclosure and other requirements are engaging into crowdfunding activities is observed. To harness the financial power of crowds, foreign jurisdictions including the United States have enacted specific legislations governing equity crowdfunding. In response to the global trend, it was argued that Hong Kong should follow the global practices in order to enhance its role as a global financial centre. Therefore, it is crucial for Hong Kong to explore its potential needs and possibilities in legislating on crowdfunding.
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Notes
- 1.
According to an estimate made by Massolution, a research company specializing in the crowdfunding industry, global funds raised through crowdfunding surged from almost US$1.5 billion (HK$11.6 billion) in 2011 to US$34.4 billion (HK$266.7 billion) in 2015. See http://www.Crowdfundinglegalhub.com (2016).
- 2.
FSTB Press release LCQ1: Regulation of Crowdfunding. Wednesday, March 18, 2015.
- 3.
This definition is adopted in a staff working paper entitled “Crowd−funding: An Infant Industry Growing Fast” published by International Organization of Securities Commissions on 5 February 2014 (“IOSCO Paper”).
- 4.
SFC, ‘Notice on Potential Regulations Applicable to, and Risks of, Crowd-funding Activities’ (SFC, 7 May 2014).
- 5.
KPMG on the Asia Pacific online alternative finance market.
- 6.
Deacons, “Hong Kong yet to offer attractive playing field for crowdfunding ventures” (Deacons, 5 June 2015) http://www.deacons.com.hk/news−and−insights/news/hong−kong−yet−to−offer−attractive−playing−field−for−crowdfunding−ventures.html.
- 7.
Part I Schedule 1 SFO.
- 8.
Section 103, SFO.
- 9.
For an issue by a Hong Kong company, sections. 38, 38B and 38D of WUMP apply; for an issue by a company incorporated outside Hong Kong, sections 342 and 342C of WUMP apply.
- 10.
Cap 32 Sch. 17 Pt.1, ss1.
- 11.
Cap 32 s.38(3), CWUMPO.
- 12.
Cap 571 Sch. 5, SFO.
- 13.
Cap 571 s114, SFO.
- 14.
FCA, Conduct of Business Sourcebook, para.4.7.8R.
- 15.
- 16.
- 17.
R.J. Shiller, ‘Capitalism and Financial Innovation’, Financial Analysts Journal, vol 69, no. 1, 2013, p. 21.
- 18.
See the Report of the Steering Group on Financial Technologies released in February 2016 by the Financial Services and the Treasury Bureau.
- 19.
KPMG, Making Hong Kong a FinTech Centre, June 2015, p. 29.
References
Brüntje D, Gajda O (2016) Crowdfunding in Europe: state of the art in theory and practice, 1st edn. Springer
Freedman DM, Nutting MR (2015) Equity crowdfunding for investors: a guide to risks, returns, regulations, funding portals, due diligence, and deal terms, 1st edn. Wiley
SFC (2014) Notice on potential regulations applicable to, and risks of, crowd- funding activities. SFC
The report of the steering group on financial technologies released in February 2016 by the financial services and the treasury bureau
KPMG (2015) Making Hong Kong a FinTech Centre
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Yeung, L. (2017). Regulation of Equity Crowdfunding in Hong Kong. In: Li, X., Xu, X. (eds) Proceedings of the Fourth International Forum on Decision Sciences. Uncertainty and Operations Research. Springer, Singapore. https://doi.org/10.1007/978-981-10-2920-2_58
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DOI: https://doi.org/10.1007/978-981-10-2920-2_58
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