European crowdfunding service providers for business

 

SUMMARY OF:

Regulation (EU) 2020/1503 on European crowdfunding service providers for business

WHAT IS THE AIM OF THE REGULATION?

It sets out common rules on:

KEY POINTS

Crowdfunding service providers must:

The management body of a crowdfunding service provider must establish and oversee adequate policies and procedures to ensure effective and prudent activity.

National authorities:

ESMA must:

Measures to ensure investor protection require crowdfunding service providers to:

The regulation does not apply to individuals using crowdfunding for personal reasons (i.e. not for their business, trade or profession) or to campaigns of over €5 million (which are regulated by Directive 2014/65/EU on better regulated and transparent financial markets (MiFiD — see summary) and Regulation 2017/1129 on prospectuses to be published when securities are issued and offered to the public (see summary).

The Commission:

The legislation amends Regulation (EU) 2017/1129 on prospectuses and Directive (EU) 2019/1937 on protecting individuals who report breaches of EU law (see summary).

FROM WHEN DOES THE REGULATION APPLY?

It applies from 10 November 2021.

BACKGROUND

KEY TERMS

Crowdfunding service: matching, via a crowdfunding platform, business funding interests of investors and those seeking finance. For more details, please refer to Article 2.1(a) of the regulation.
Project owner: an individual or a business seeking funding via a crowdfunding platform.

MAIN DOCUMENT

Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European crowdfunding service providers for business, and amending Regulation (EU) 2017/1129 and Directive (EU) 2019/1937 (OJ L 347, 20.10.2020, pp. 1-49)

RELATED DOCUMENTS

Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law (OJ L 305, 26.11.2019, pp. 17-56)

Communication from the Commission to the European Parliament, the Council, the European Central Bank, the European Economic and Social Committee and the Committee of the Regions — FinTech Action plan: For a more competitive and innovative European financial sector (COM(2018) 109 final, 8.3.2018)

Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (OJ L 168, 30.6.2017, pp. 12-82)

Successive amendments to Regulation (EU) 2017/1129 have been incorporated into the original text. This consolidated version is of documentary value only.

Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC (OJ L 337, 23.12.2015, pp. 35-127)

See consolidated version.

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Action Plan on Building a Capital Markets Union (COM(2015) 468 final, 30.9.2015)

Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ L 173, 12.6.2014, pp. 349-496)

See consolidated version.

Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, pp. 84-119)

See consolidated version.

Directive 97/9/EC of the European Parliament and of the Council of 3 March 1997 on investor-compensation schemes (OJ L 84, 26.3.1997, pp. 22-31)

last update 01.02.2021