Finland’s presidency of the European Council and Parliament reached a preliminary political agreement on a crowdfunding framework, which upon finalization of the technical work, will be submitted to the EU ambassadors for endorsement. The framework was constructed to make it easier for crowdfunding platforms to operate on a cross-border basis “by harmonising the minimum requirements when operation in their home market and other EU countries", as well as the implementation of investor protection rules that aim to improve legal certainty while considering compliance costs for providers. The preliminary framework agreement will encompass crowdfunding campaigns up to EUR 5 million over a 12-month period. The prospectus regulation and MiFID will regulate the larger crowdfunding operations, however, crowdfunding supported by reward and/or donations are not within the scope of the framework.
“The text sets outs common prudential, information and transparency requirements. It also includes specific requirements for non-sophisticated investors. At the same time, the rules for EU crowdfunding businesses will be tailored 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).”
WOCCU will continue to monitor this issue as it is submitted for endorsement to the EU ambassadors and the proposed regulation is adopted. Additional information on the Presidency and Parliaments’ preliminary crowdfunding rules can be found here.