ASIC has issued guidance to promoters of ‘crowd funding’ to clarify arrangements which may be regulated by ASIC under the Corporations Act 2001 and Australian Securities and Investments Commission Act 2001. ASIC has also highlighted some risks for operators of crowd funding websites and people considering participating in crowd funding projects. ‘Crowd funding’ involves the use of the internet and social media to raise funds in support of a specific project or business idea. Project sponsors or pledgers typically receive some reward in return for their funds. In some cases, the reward expected may be of minor value and is merely incidental rather than the purpose of the contribution. Along with other factors, depending on the type of ‘reward’ offered by the project creator to those giving funding, crowd funding could involve a managed investment scheme under Chapter 5C of the Corporations Act, provision of a financial services requiring an Australian financial services (AFS) licence or a fundraising under Chapter 6D of the Corporations Act. There are also advertising and publicity restrictions that apply to advertising and publicising an offer of financial products or securities, in certain circumstances. n addition, as a result of its current monitoring of crowd funding, ASIC has identified some risks in crowd funding that website operators can help manage. These include: (i) a risk of fraud being carried out through crowd funding websites. Website operators can help manage this risk by doing background and credentials checks on project creators to help minimise the opportunity for fraud; (ii) a risk that funded projects are not completed and the project sponsors do not receive the rewards promised. As well as background and credentials checks, the website operators can manage this risk by assessing the viability of the project before it is posted on their website, requiring the project creator to provide more information on how and when they complete the project and consider requiring the project creator to report periodically through the website on their progress in implementing the project; and (iii) a risk that the money collected is lost due to the fraud or bankruptcy of the website operator before the money is passed on to the project creator. The website operator can manage this risk by holding all crowd funding money in a trust account separate from its own assets, avoiding excessive holding periods and implementing appropriate internal controls to ensure withdrawals are appropriate.