On 7 October 2020, the official journal of the European Union published the European crowdfunding regulation (‘CFR’), as well as a related directive to amend MiFID II. As the CFR will provide many opportunities, it is worthwhile to explore the CFR and the impact it is likely going to have on the European crowdfunding industry.

The CFR seeks to facilitate the scaling up of crowdfunding services across the internal market to increase access to finance for entrepreneurs, start-ups, scale-ups and SMEs in general. Till now, crowdfunding services have not been subject to EU action. Crowdfunding service providers (‘CSP’) were, therefore, subject to the different national frameworks implementing existing EU law that hindered the emergence of a European market for crowdfunding. The EU regime seeks to create a level playing field by introducing a harmonised EU legal framework for these service providers. Correspondingly, the CFR introduces a European passport for CSPs.

This contribution seeks to assess whether and to what extent the CFR will lead to harmonisation of (equity- and lending-based) crowdfunding in Europe. To that end, this contribution evaluates several relevant aspects of the CFR, including its scope, ‘platform’, sales and marketing regulation that targets CSPs.

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Source: ACE - April 2021

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