IR - Central Bank announces new crowdfunding regulatory regime
On 13 January 2022, the Central Bank of Ireland has announced a new regulatory regime for Crowdfunding Service Providers under EU Regulation.
The Central Bank of Ireland has been designated the competent authority for crowdfunding regulation in Ireland. A number of provisions of the Consumer Protection Code 2012 will now apply to advertising by crowdfunding service providers in Ireland.
There are two main types of crowdfunding that are covered by this Crowdfunding Regulation - investment-based crowdfunding and peer-to-peer/loan-based crowdfunding. The new framework will require in-scope crowdfunding service providers to be authorized and they will be subject to operational and prudential requirements as well as investor protection measures. Crowdfunding service providers will be required to include appropriate warnings in their advertising to prospective investors. They must display a prominent warning message on all advertisements that investment in crowdfunding projects entails risks, including the risk of partial or entire loss of the money invested; and that any investment is not covered by a deposit guarantee scheme or by an investor compensation scheme.