Capital Markets Union: Publication of a crowdfunding framework
On 20 October 2020, EU Directive 2020/1504 and EU Regulation 2020/1503 of 7 October 2020 on European Crowdfunding Service Providers (ECSPs) were published in the Official Journal.
This crowdfunding framework sets out common prudential, information and transparency requirements for ECSPs, common authorisation and supervision rules for national competent authorities and gives the ESMA an enhanced role to facilitate coordination, mediate disputes and develop relevant technical standards. It covers crowdfunding campaigns of up to 5 million euros (calculated over a twelve-month period), with larger operations regulated by MiFID and the prospectus regulation.
Two new categories of investors have also been created and defined by the regulation: sophisticated investors and non-sophisticated investors. Non-sophisticated investors benefit from appropriate additional investor protection safeguards before being able to invest. Both the directive and the regulation came into force on 9 November 2020 and the regulation will be applied from 10 November 2021. Member States have until 10 May 2021 to adopt and publish the required measures.