Crowdfunding

Learn more about types of crowdfunding activities and the regulations that govern them in Hong Kong.
Overview

Crowd-funding is a financial innovation that has seen a popular surge in recent years and affects a number of key global initiatives outlined by IOSCO and the G20. These include the diversification and broadening of securities markets. Data suggests that the peer-to-peer lending market doubles each year, accounting for approximately USD6.4 billion globally.

Crowd-funding works on the basic premise that small amounts of money, obtained from a large number of individuals or organisations, are used to fund a project, business or personal loan, and other needs through an online web-based platform. The benefit is the spreading of risk: investors are individuals within a larger audience who raise the funds small incremental amounts. Additionally, crowd-funding provides an affordable and attainable option for raising capital for small start-ups. In return, small investors receive the opportunity to participate in investment opportunitieis that might not otherwise be available to them.

The Regulation in Hong Kong

Crowd-funding Activities

References:
OICV – IOSCO Working Paper. Crowd-funding: An Infant Industry Growing Fast
Bloomberg, Peer-to-Peer Lending, by Noawh Buhayar, June 7, 2017

The Regulation of Crowd-funding in Hong Kong 1401 787 Hauzen

The Regulation of Crowd-funding in Hong Kong

Unlike other commonwealth jurisdictions such as the UK and New Zealand, Hong Kong has yet to introduce regulations which specifically address the control or facilitation of crowd-funding activities.

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Crowd-funding Activities 1401 787 Hauzen

Crowd-funding Activities

Information on four common types of crowd funding which can be grouped into two main categories: (i) Community Crowd-funding; and (ii) Financial Return Crowd-funding.

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