Page last updated: 23 September 2021

Crowdfunding service providers

Crowd funding is a type of financial market service covered by the Financial Markets Conduct Act 2013 (FMC Act). An equity-based crowd funding service licence holder acts as an intermediary between companies issuing shares and investors purchasing shares. The licence holder provides a facility where offers of shares can be made to the investing public.

Crowd Funding

The type of crowd funding covered by a licence

Please contact us to get a copy of a licence application, either by email [email protected] or phone

Licensing declarations and certificates

For applicants

SD1.0  Certificate of compliance and authority to apply (applicant or their authorised person)

SD1.1  Declaration by current/proposed director of licence applicant

SD1.2  Declaration by current/proposed senior manager of licence applicant

SD1.3  Curriculum vitae of management team member of licence applicant

SD1.4  Declaration  by Independent trustee (individual) -  a combined certificate and declaration

For related bodies of the applicant

SD2.1  Declaration by executive director of related body to licence applicant

SD2.2  Declaration by senior manager of related body to licence applicant

For relevant parties to the applicant

SD3.1  Declaration by director of relevant party to licence applicant

SD3.2  Declaration by senior manager of relevant party to licence applicant

SD3.3  Declaration by individual relevant party to licence applicant (such as owner)

The fee payable to the FMA when applying for a new FMC Act licence for crowd funding services is $6,238.75 (incl. GST). The fee includes 40 assessment hours.

We may charge an additional fee at the FMA staff hourly rate where the assessment of an application exceeds 40 assessment hours. If it appears that an additional fee may be charged for your application, the FMA will inform the applicant in advance and provide them with a reason for this. We may also invoice for any costs of external advice or assistance.

Levies

The Financial Markets Authority (Levies) Regulations 2012 (the Regulations), as amended in 2020, set out the levies payable by industry. The levies are set by the Ministry of Business, Innovation, and Employment (MBIE).

The FMA receives funding from the Crown and a proportion of our costs is recouped from industry through levies.

Levy Classes

A financial markets participant falls within one or more levy ’class’, depending on what financial services they provide.

  • A levy must be paid for every levy class the financial markets participant falls within. Levies are payable on the relevant leviable event as described in column 3 of Schedule 2 in the Regulations.
  • Some levy classes have been split in order to recognise the variations in size and nature of different financial market participants.
  • Most levies are paid when making an annual confirmation to the Registrar of Financial Service Providers (the Registrar).
  • Most levies are payable to the Registrar, via the (FSPR). However, some levies are payable directly to the FMA. This is set out in column 4 of Schedule 2 in the Regulations.
  • The following levy classes are invoiced directly by the FMA: Levy Class 8, Levy Class 8A, Levy Class 10, Levy Class 10A and Levy Class 13.

You should be familiar with levies and Schedule 2 of the Levy Regulations.

Levy waivers

We have discretionary power to waive a levy (in whole or part).

We will only do so if we are satisfied that the circumstances or characteristics of the financial markets participant are exceptional when compared with the circumstances or characteristics of others in the same class, so that it would make it inequitable for the person to pay the levy. The threshold is deliberately high.

The waiver power is not intended to be used to revisit settled policy positions.

Once we receive a waiver application and the fee, we will assess it.  If we decide to grant the waiver, we must notify our decision in the Gazette, and publish the decision and reasons for it on our website.

How to apply for a levy to be waived

You will need to email the following information to [email protected] with the subject line ‘Levy waiver application’.

  • Name of person or entity applying for the waiver.
  • Contact person for correspondence concerning the application including address, phone number and email.
  • Indicate the persons/entity who will receive the benefit of any waiver granted.
  • Specify which class(es) you seek a waiver from and whether a waiver is sought from the full levy or part and the amount thereof.
  • Let us know your preferred date for any waiver to take effect.
  • Explain why the waiver should be granted and why your circumstances are exceptional when compared with others in the same class.
  • Provide all relevant facts in support of your application.
  • Explain any regulatory benefit of FMA granting the waiver.
  • Give details of any previous contact with officials (including their names) at FMA or MBIE (including the Companies Office) on the matter.

How to pay your waiver application fee

You can pay by electronic deposit or internet banking. Payment can be made by applicants or law firms making applications on behalf of their clients.

How to pay your waiver application fee

You can pay by electronic deposit or internet banking. Payment can be made by applicants or law firms making applications on behalf of their clients.

The person paying the application fee must be the person who pays the subsequent fees and costs. For example, if a law firm pays the application fee, that law firm must also pay any additional fees and costs.

We recommend if law firms apply for waivers on behalf of their clients, the parties discuss and agree who will be responsible for paying the FMA’s fees before submitting a waiver application.

Payment option How to pay Additional information
Electronic deposit or internet banking Where bill pay is available please select ‘Financial Markets Authority - Other'
Otherwise, our bank details are:
Bank: Westpac
Account name: Financial Markets Authority
Account number: 03-0584-0198005-000
To ensure we process your payment correctly please provide the following information:
Particulars: Payer’s name*
Code: Waiver
Reference: Applicant’s name
You do not need to forward a hard copy of your application if paying electronically

* This is the name of the person paying the application fee. This person will be invoiced for any subsequent fees and costs. Payment by credit card is not available for this application process.

What are the fees

  • A payment of $1,265 should accompany each application.
  • This covers the application fee of $115 set out in the Financial Markets Authority (Fees) Regulations 2011 and an advance of $1,150 (including GST) for fees and costs to be incurred.
  • These regulations set out charging rates of $230 (including GST) per hour for time spent by FMA Board members and $178.25 (including GST) per hour for time spent by FMA staff.
  • These regulations are set by MBIE.

How long does it take

  • Once we have been provided with all relevant information, it generally takes around six weeks to process an application.
  • This may be longer if any policy questions arise.
  • If your application is urgent, please provide the date you need the decision by.
  • You must also provide reasons for requesting urgent consideration.

Offences

It is the responsibility of each financial service provider to ensure they are registered for the service(s) they provide and have paid the appropriate levies. As part of their online annual confirmation to the Registrar, they must select all of the applicable classes to determine the levies payable and confirm the information they have provided is true, correct and complete.

Under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (the FSP Act) it is an offence to:

  • provide services you are not registered for or state you are registered for a particular financial service when you are not
  • make a representation relating to any document or information required by the FSP Act or its regulations knowing that it is false or misleading, or omit any matter knowing such omission is false or misleading.

These offences could result in a fine of up to $100,000 and/or imprisonment for individuals, and a fine of up to $300,000 for businesses.

It is also an offence under the FSP Act to fail to notify the Registrar if any of the details contained on the FSPR are no longer correct. Failure to notify could result in a fine of up to $10,000.

All licensed trustees have a number of obligations, in addition to the minimum standards and standard conditions set out in their licence. These obligations include meeting the relevant professional standard of care; monitoring your compliance; identifying material changes of circumstances; meeting reporting obligations and notifying the FMA of certain events and providing us with information. A list of your obligations can be viewed below. 

Changes to directors or senior managers

Forms to be completed if there are changes to directors or senior managers

Download Notification of change of director or senior manager by licensee and/or key personnel of authorised body PDF(Refer Financial Markets Conduct Regulations 2014 r 191).

Minimum standards

Licensed crowd funding service providers will have to meet and maintain certain minimum standards. The key standards in section 396 of the FMC Act including the following:

  • You must be a fit and proper person for the role of independent trustee.
  • You or your business must be capable of performing the service effectively and in keeping with your licence conditions.
  • We must have no reason to think you’re likely to contravene your licensee obligations.
  • There are other important requirements.

Download the crowd funding licensing guide to understand the minimum standards you’ll need to show you meet, and information about the details and supporting documents you’ll need to provide.

Fair dealing

The fair dealing provisions of the FMC Act prohibit misleading or deceptive conduct, false, misleading or unsubstantiated representations, and offers of financial products in the course of an unsolicited meeting.

The FMA has issued a guide to fair dealing in advertising and communications specific to crowd funding and peer-to-peer lending service licence. The purpose of this guidance document is to ensure licensed crowd funding and peer-to-peer lending service providers understand their obligations when advertising or communicating with customers.

Crowdfunding issuers fair dealing

Under exemptions in financial markets law, crowdfunding issuers don't need to prepare a product disclosure statement if you are using a licensed crowdfunding service provider. Instead, you will provide more limited information about your business when you make offers. 

You will need to comply with the general fair dealing provisions in Part 2 of the FMC Act. The basic obligations you will have include not making:

  • false or misleading representations, for example, you must be honest about who you are and what you're going to use the money for
  • unsubstantiated representations, for example, you must ensure you have a reasonable grounds for any financial projections provided to potential investors.

Other laws will also apply. For example, you will need to provide financial information to your shareholders under the Companies Act.  And, where you have 50 or more shareholders those shareholders may have to comply with the Takeovers Code when buying shares.

Anti-money laundering and countering financing of terrorism

The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 imposes several obligations on crowd funding licence holders;

  • You must provide a written risk assessment of the money laundering and financing of terrorism activity you could expect in the course of running your business.
  • You are required to implement an anti-money laundering and countering financing of terrorism programme that includes procedures to detect, deter, manage and mitigate money laundering and the financing of terrorism.
  • You are required to appoint a compliance officer to administer and maintain your programme.
  • You are required to perform due diligence processes on your customers. This includes customer identification and verification of identity.
  • You are required to report suspicious transactions.

Read more about AML/CFT reporting obligations.

Financial reporting

Crowd funding service providers are FMC reporting entities and must comply with the following:

Regulatory reporting

Every licensed crowd funding provider is required to complete and submit an annual regulatory return which is a series of questions about your business and how your licensed service is used. The information you provide us through the annual return helps us to:

  • better understand your business and the services you offer;
  • ensure the information we have on your business is current; and
  • focus our monitoring activities more effectively.

Licensees are now able to submit their regulatory returns online at services.fma.govt.nz.

To complete the return, you will need to log into Real Me. After logging in you should select “Complete a regulatory return” and enter the FSPR number of the entity the return is being completed for. Please follow the instructions included in the form to complete the return, you may save and come back to the form at any time.

If you have any questions on completing the new form, any questions, please contact the FMA on [email protected].  

Notifying the FMA

Licensee obligations include notifying the FMA of certain events and providing us with information. All notifications should be emailed to [email protected], noting the relevant obligation in the subject line of your email.

The FMA has wide powers to exempt persons or transactions from some financial markets law requirements. These powers enable us to remove rigidities in the law and ensure requirements for businesses are reasonable and cost-effective. Find out more about exemptions you can apply for under the FMC Act and current exemption notices.

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