The revamp of New Zealand's 34-year-old securities law looks set to capture a relatively new way of raising small amounts of money from hordes of people if it strays into the territory of offering returns.
Crowdfunding, where individuals turn to large, primarily web-based networks for small donations, has mainly been used to pay for community projects and artistic endeavours - the most famous local example was when film director Taika Waititi used it to help pay for the US distribution of his movie 'Boy'.
The international experience has seen crowdfunding drift into capital raisings, something the local financial markets regulator expects it will be able to keep tabs on through the passage of the Financial Markets Conduct Bill.
Parliament's Commerce Committee recommended Commerce Minister Craig Foss consider prescribing crowdfunding intermediary services to let providers apply for a licence, in its report back on the legislation last month.
Financial Markets Authority head of legal Liam Mason told BusinessDesk local crowdfunding operations are typically for one-off community or creative projects, but that the new bill is flexible enough to cater for a shift into equity raising and would let the government license crowdfunding providers.