Capital markets union: new rules for crowdfunding platforms
On 20 July 2020, the Council adopted new rules to improve the way crowdfunding platforms operate across the EU.
The new framework will remove barriers for crowdfunding platforms to provide their services cross-border by harmonizing the minimum requirements when operating in their home market and other EU countries. It will also increase legal certainty through common investor protection rules.
The new rules will cover crowdfunding campaigns of up to EUR 5 million over a 12-month period. Larger operations will be regulated by MiFID and the prospectus regulation. Reward- and donation-based crowdfunding fall outside the rules' scope since they cannot be regarded as financial services. The rules for EU crowdfunding businesses will be tailored depending on whether they provide their funding in the form of a loan or an investment (through shares and bonds issued by the company that raises funds).
The framework defines common authorization and supervision rules for national competent authorities. The European Securities and Markets Authority (ESMA) will have an enhanced role to facilitate coordination and cooperation, through a binding dispute mediation mechanism and the development of technical standards.