The proposed draft regulation and amended directive (EU Crowdfunding Regime) published by the European Commission (EC) attempts to address this problem by establishing a harmonised authorisation regime, allowing certain EU authorised crowdfunding platforms to apply for an EU passport, which will permit them to provide services to EU users based on a single set of rules.
Key features of the EU Crowdfunding Regime
The new EU Crowdfunding Regime will apply to:
- lending-based crowdfunding platforms (P2P platforms) facilitating ‘business funding’ (meaning that lending to consumers is out of scope and remains separately regulated at an EU level by the Consumer Credit Directive (Directive 2008/48/EC); and
- investment-based crowdfunding platforms (IB platforms) in relation to transferable securities only,
(together, the Qualifying Platforms).
The EU Crowdfunding Regime will not apply to crowdfunding platforms that offer funding with a consideration of more than €5 million, which shall be calculated over a 12 month period.
Further, donation-based crowdfunding platforms, reward-based crowdfunding platforms and crowdfunding platforms which facilitate initial coin offerings are outside the scope of the EU Crowdfunding Regime. Whether these platforms are subject to authorisation and regulation in the EU will be determined by each EU member state.