Regulation on European Crowdfunding Service Providers for Business
On 24 June 2019, the Council adopted its position on the Proposal on European Crowdfunding Service Providers (ECSP) for Business. The aim is to improve access by investors and businesses to new financing sources by establishing a new regulatory framework including the minimum requirements on platforms.
The main elements of the Council position include:
- removing barriers for crowdfunding platforms operating cross-border;
- providing tailored rules for EU crowdfunding businesses depending on whether they provide their funding in the form of a loan or an investment (through shares and bonds issued by the company that raises funds);
- providing a common set of prudential, information and transparency requirements to ensure a high level of investor protection;
- defining common authorisation and supervision rules for national competent authorities.
The proposal would cover crowdfunding campaigns of up to € 8 million over a 12 months period as a general rule. Where Member States have decided to set the threshold for prospectus obligations below € 8 million, they should be able to prohibit the raising of capital for crowdfunding projects from its residents for amounts exceeding that national threshold. Reward- and donation-based crowdfunding fall outside the scope of the proposal since they cannot be regarded as financial services.
- EU 27