The long-awaited and first ever regulation on European Crowdfunding Service Providers has passed through the European Parliament, enabling future cross-border crowdfunding services.
For ECR Group Rapporteur Eugen Jurzyca, it is a real break-through: “The first EU-wide crowdfunding regulation is in place! I hope it enhances cross-border investments and improves access to alternative financing for enterprises.”
Crowdfunding is an attractive funding option for start-ups and SMEs. Member States will no longer require crowdfunding service providers operating on a cross-border basis, to have a physical presence within their territory. National competent authorities will remain responsible for the authorisation and supervision of crowdfunding service providers. Meanwhile, the European Securities and Markets Authority will act as a mediator for aspects related to supervision.
A single set of rules will apply to crowdfunding services in the EU. As part of this new framework, up to 5,000,000 Euros may be allocated over a period of 12 months per project owner. This will apply to both lending-based and equity-based crowdfunding. Also included in the scope of the regulation are the specific shares of freely transferable private limited liability companies and the individual portfolio management of loans. However, the rules will not cover charity or cryptocurrencies-based crowdfunding.
The crowdfunding regulation has been included in the European Commission’s Action Plan on technological innovation in financial services and belongs to the Capital Markets Union family. It incorporates diverse protective elements, such as dividing investors between sophisticated and non-sophisticated, introducing a maximum 4 day pre-contractual reflection period and obliging a provision of information regarding the risks and charges of their investments. Soon, the regulation will be published in the Official Journal of the EU and the new rules will be applicable one year later.
16 February 2024
16 February 2024
14 February 2024