Corporations Act 2001

CHAPTER 6D - FUNDRAISING  

PART 6D.3A - CROWD-SOURCED FUNDING  

Division 3 - Making offers under this Part  

SECTION 738Q   GATEKEEPER OBLIGATIONS OF CSF INTERMEDIARIES  

CSF intermediary to conduct checks before publishing CSF offer document

738Q(1)    
A CSF intermediary must not publish a CSF offer document (or a document that purports to be a CSF offer document) on a platform of the intermediary unless the intermediary has, before starting to publish the document, conducted the checks prescribed by the regulations to a reasonable standard.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

738Q(2)    
For the purposes of this section, the regulations may prescribe what constitutes a reasonable standard in relation to all or any of the checks.

738Q(3)    
An offence based on subsection (1) is an offence of strict liability.

738Q(4)    
For the purpose of a provision of this Part that refers to a matter that a CSF intermediary knows, has reason to believe or is satisfied or not satisfied, if:

(a) a CSF intermediary contravenes subsection (1) by not conducting a check (or by not conducting a check to a reasonable standard); and

(b) had the intermediary conducted the check (or conducted it to a reasonable standard), the intermediary would have known or had reason to believe the matter, or would have been satisfied or not satisfied in relation to the matter;

then the matter is taken to be one that the intermediary knows or has reason to believe, or in relation to which the intermediary is satisfied or not satisfied (as the case requires).

CSF intermediary not to publish CSF offer document if not satisfied of certain matters etc.

738Q(5)    
A CSF intermediary must not publish a CSF offer document (or a document that purports to be a CSF offer document) on a platform of the intermediary, or continue to publish such a document while the offer is open, if:

(a) the intermediary is not satisfied as to the identity of the company making the offer, or of any of the directors or other officers of the company; or

(b) the intermediary has reason to believe that any of the directors or other officers of the company are not of good fame or character; or

(c) subject to subsection (6) - the intermediary has reason to believe that the company, or a director or other officer of the company, has, in relation to the offer, knowingly engaged in conduct that is misleading or deceptive or likely to mislead or deceive; or

(d) the intermediary has reason to believe that the offer to which the document relates is not eligible to be made under this Part.

Note 1: The CSF intermediary must close the offer (see paragraph 738N(4)(e) ).

Note 2: The question whether a CSF intermediary is not satisfied in relation to a matter, or has reason to believe a matter, is affected by subsection (4) of this section.

Note 3: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

738Q(6)    
In the case of a CSF offer document that has already started to be published on a platform of a CSF intermediary, paragraph (5)(c) does not apply in relation to there being a misleading or deceptive statement, an omission, or a new circumstance, that renders the document defective (as defined in section 738U ).

Note: The consequences of a CSF offer document being defective are dealt with in Division 4. If the responsible intermediary becomes aware that the document is defective, they must remove the document from the offer platform and either close or suspend the offer (see subsection 738X(2) ).

CSF intermediary to have adequate arrangements to ensure compliance with gatekeeper obligations

738Q(7)    
A CSF intermediary must have in place adequate arrangements, recorded in writing, to ensure compliance with its obligations under subsections (1) and (5).

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).