The Securities and Exchange Board of India (Sebi) is taking a fresh look at setting up a regulatory framework for crowdfunding, said two people aware of the development.
Sebi’s proposals include introducing a minimum net worth criteria for investors to be eligible to invest in start-ups through such platforms, capping individual investments, and standardising disclosure requirements for start-ups raising the money, the two said on condition of anonymity.
“All the money invested through online companies goes to the unlisted space and it can be very risky. If the number of public investors crosses 200, the online entity is supposed to follow public issue norms,” said one of the two.