Australians attracted to the Turnbull Government's proposed 20% tax offset for innovation investments could fall victim to the finance sector’s antiquated paper based investor certification.
Regulatory oversight of sophisticated investors is failing to keep pace with real time investing with tech investors just as likely to fall through the gap.
Founder of Cygura, Peta Tilse, has developed Australia’s first online sophisticated investor certificate portal.
“We all buy, sell and invest online and it makes sense that our regulatory processes should also keep pace and be online, " Ms Tilse said.
Peta, an industry long termer, ABC radio regular and Fellow of FINSIA* first noticed the problem as an advisor at UBS.
“Investors and their advisors rely on these certificates to determine whether the client is ‘swimming between the flags’ i.e. within retail investor protections and when they are “outside the flags” in the more lucrative but riskier wholesale market,” she said.
“It beggars belief that in 2016, clients and their advisers are still using paper certificates to qualify sophisticated investors,” Ms Tilse said.
"The irony of new tech investors falling victim to our paper based regulatory system is an unnecessary embarrassment for our financial sector.
Ms Tilse said David Murray’s Financial System Inquiry specifically asked the Government to pursue a technological solution to this problem.**
"The Government's first step in embracing innovation is to call for industry wide adoption of a robust online portal for certification.
“The current practices have always seemed ridiculous to me, which is why we developed Cygura,” Ms Tilse said.
“While my motivation originally was to save time for advisers, accountants and clients. But in light of the current climate, the most important feature of Cygura as an online portal, is that it protects consumers better.”
Ms Tilse explained that the creation and storage of investor certificates online will provide an efficient query for the ATO when verifying Tax Offset claims.
"Centralised databases makes compliance reporting easier for ASIC to audit, and allows the Turnbull Government to directly support innovative private companies.”
