- To help start-ups attract investments, the Securities and Exchange Board of India (SEBI) has proposed new norms of crowdfunding through social networks and web-based platforms.
- Under the proposed norms:
- Only SEBI-registered entities and accredited investors can participate in crowdfunding.
- These include institutional investors, companies, HNIs and financially-secure retail investors advised by investment advisors or portfolio managers.
- For retail investors, the cap is fixed at Rs.60,000 or 10% of their net worth.
- Companies can raise up to Rs. 10 crore a year.
- The entities should not be associated with a business group having a turnover of more than Rs. 25 crore.
- Entities with an established business listed on an exchange or being in existence for 4 years or more are prohibited from participating.
- Entities engaged in real estate and financial sector business are also barred.
- Read at: http://www.thehindu.com/todays-paper/tp-business/sebi-floats-crowdfunding-rules/article6124654.ece
Exams Perspective:
- Crowdfunding
- SEBI
- High Networth Individuals (HNIs)