Financial Markets Conduct Regulations 2014

196 Condition for provider of crowd funding service to make warning statement available


A market services licence for a provider of a crowd funding service is subject to a condition that the provider must,—


if the facility is available through an Internet site, ensure that a warning statement is prominently displayed—


on the home page of the site; and


to an investor, on a page on the site, immediately before the investor uses the site to apply for, or otherwise acquire, financial products; and


in all cases, ensure that a warning statement is prominently displayed in all application forms for acquiring financial products using the service.


The warning statement must be in the following form:

Warning statement about crowd funding

Equity crowd funding is risky.

*Issuers using this facility include new or rapidly growing ventures. *Investment in these types of businesses is very speculative and carries high risks.

You may lose your entire investment, and must be in a position to bear this risk without undue hardship.

New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision.

The usual rules do not apply to offers by issuers using this facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.

Ask questions, read all information given carefully, and seek independent financial advice before committing yourself.”

*Omit this sentence if the facility is confined to issuers for whom the sentence would be inapplicable.