Oman’s crowdfunding regulation: Here is what you need to know

Oman’s Capital Market Authority (CMA) on the 22^nd August 2021 published its draft Regulation of Crowdfunding Platform Activity. As reported earlier, the first crowdfunding platform is expected to be licensed before the end of the year.

Here are the salient points of the 18-page draft as viewed by IFN Fintech:

• Allows platform operators to provide crowdfunding through donation, reward-based, equity and peer-to-peer models
• Funding only for commercial companies and enterprises, not individuals
• Investors from outside the Sultanate allowed to invest through Omani crowdfunding platforms; similarly companies in and outside of the Sultanate are allowed to raise funding through these platforms
• No restrictions on investment amount for sophisticated investors investing via equity crowdfunding platforms, a limit of OMR100,000 (US$259,024) for angel investors within a 12-month period and a limit of OMR20,000 (US$51,804.9) for retail investors within a 12-month period
• Funding applicants operating over a year with audited financial statements from a CMA-accredited audit firm may apply for funding exceeding OMR100,000 whereas companies constituted less than 12 months can only apply for funding up to OMR100,000 with approved financial statements prepared not more than two months before
• Where an Islamic investment note is offered, the operator must establish and maintain a Shariah compliant account with an Islamic bank or window approved by the Central Bank of Oman
• Where an Islamic investment note is offered, a Shariah advisor — either individual or company — must be appointed
• The Shariah advisor to advise and monitor the Shariah compliance of Islamic investment products offered and issue Fatwas where applicable, and
• The operator, including employees, shareholders and board of directors must disclose to the public on its platform if it provided loans or guarantees to any fund applicants hosted on its platform; if it holds any shares in any of the applicants; if it pays any referrer or introducer or receives any payment in connection with an applicant.

The draft is open for market feedback for a period of three weeks from the issuance date.