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Capital markets regulator is set to unveil its crowd funding norms very soon. The market regulator had put out a discussion paper on crowd funding in June 2014, five months after the international body of securities regulators, IOSCO, put out a report on the infant industry.
In its discussion paper, SEBI indicated that it was exploring only three types of crowd funding — equity-, debt- and fund-based.
Of this, the first two approaches would use a web-based crowd funding platform to raise money from investors (who have access to such a platform) through private placement. The fund-based route is modelled on SEBI’s alternative investment funds regulations, the regulator had said.
The paper identified qualified institutional buyers, corporates with net worth of over ₹20 crore, HNIs with net worth of over ₹2 crore and eligible retail investors whose investment was proposed to be capped at ₹60,000.
It proposed that equity-based and debt-based crowd funding shall allow private placement offers through internet-based crowd funding platforms to any number of QIBs and a maximum of 200 HNIs and ERIs (eligible retail investors) combined.
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