European Commission

New rules put forward to help crowdfunding platforms grow across EU



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The European Commission has proposed new rules to help crowdfunding platforms to grow across the EU’s single market.

These proposals – which are part of the European Commission’s fintech action plan – will enable crowdfunding platforms to offer their services EU-wide and improve access to this form of finance for start-ups and SMEs.

At present, it is difficult for many crowdfunding platforms to expand into other EU countries, but once these proposals have been adopted by the European Parliament and the Council, the proposed regulation will allow platforms to apply for an EU label based on a single set of rules.

Currently, one of the major hurdles is the lack of common rules for crowdfunding across the EU.

This increases compliance and operational costs, which prevents platforms expanding across the EU.

The EU label will allow crowdfunding platforms to offer their services across all countries across the EU.

“To compete globally, Europe's innovative companies need access to capital, space to experiment and scale to grow,” said Valdis Dombrovskis, vice-president responsible for financial stability, financial services and Capital Markets Union at the European Commission.

“This is the premise for our fintech action plan.

“An EU crowdfunding licence would help crowdfunding platforms scale up in Europe.

“It will help them match investors and companies from all over the EU, giving more opportunities for firms and entrepreneurs to pitch their ideas to a wider base of funders.”

The proposed regulation will see investors on crowdfunding platforms protected by clear rules on information disclosures, rules on governance and risk management and a coherent approach to supervision.

Jyrki Katainen, vice-president for jobs, growth, investment and competitiveness at the European Commission, added: “New technologies are transforming the financial industry by revolutionising the way people access financial services.

“Alternative sources of funding – such as crowdfunding or P2P lending – directly link savings with investments.

“They make the market more accessible for innovative entrepreneurs, start-ups and small companies.

“This objective is at the heart of the Capital Markets Union."

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