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The Economic and Monetary Affairs Committee of the European Parliament recently published a draft report on the proposed regulation of the European Parliament and of the Council on European providers of crowdfunding services for companies.

The draft report calls for implementing various changes to improve the proposed regulation. The most significant changes proposed for the regulation are as follows:

  • While the proposed regulation sets a maximum limit of €1 million for each crowdfunding project, the draft report suggests raising the financing threshold to €8 million.
  • Due to the various levels of complexity offered by crowdfunding platforms, the draft report calls for the future regulation to draw a distinction between platforms that (i) facilitate brokering between investors and companies seeking financing, and (ii) define the price and range of offers.
  • The draft report also says that this regulation would be an opportunity to regulate offerings known as “Initial Coin Offerings” (ICOs), as these offerings are currently operating without regulations.
  • The report clarifies that crowdfunding providers from third countries that would like to offer their services in the European Union can only do so if (i) they are authorized by the competent authorities of the countries in question, and (ii) can guarantee that they meet the same rules as crowdfunding providers with European passports.

Although this draft report is being published in the initial phases of the formulation of the proposed crowdfunding regulation, it reflects the EU authorities’ intent to move forward with a single regulation of this dynamic financing system that has grown tremendously in recent years.

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cristina.clos@cuatrecasas.com

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