CMA posts draft crowdfunding regulation for public consultation

Business Monday 23/August/2021 17:37 PM
By: Times News Service
CMA posts draft crowdfunding regulation for public consultation

Muscat: The Capital Market Authority (CMA) has published a draft crowdfunding regulation on its website for public consultation and feedback from the public and institutions for the achievement of community participation.

The draft crowdfunding regulation was prepared in response to the new developments and innovation in Fintech and an endeavour to regulate such types of financing products as part of the key programmes of Oman Vision 2040 that aim to provide an innovative investment environment for financial facilities and their multiple options to stimulate establishing creative productive and investment projects.

Crowdfunding platforms are funding options for small and medium enterprises in the Sultanate to enhance economic development and creation of employment opportunities to enhance financial inclusion and to support innovations to furnish funding services and products at reasonable pricing meeting the needs of individuals and institutions sustainably and responsibly.

Crowdfunding platforms operate through the licensed company creating an electronic platform facilitating to the companies and entrepreneurs to offer funding applications and plans on the platform and then the funding parties, whether individuals or institutions, select the appropriate offer and the platform act as an intermediary between the parties in consideration of a commission. The process is regulated by the rules issued by the CMA.

Key platforms include donations for funding without return, reward funding in consideration of reward on operation, equity in consideration of shares in the capital and peer to peer platform.

Crowdfunding regulation contains the provisions in 11 chapters on the obligations of the applicant for funding and for the license as well as the obligations of the operator toward the investors with a chapter on Sharia advisor for offering Sharia-compliant investment notes.