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Communication on Crowdfunding in the EU

Communication on Crowdfunding in the EU. Key aspects of t he Communication. - CF: ‘ open call to the wider public to raise funds for a specific project ’ , often published through the internet, open for a specific time period

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Communication on Crowdfunding in the EU

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  1. Communication on Crowdfunding in the EU

  2. Key aspects of the Communication • - CF: ‘open call to the wider public to raisefunds for a specificproject’, often published through the internet, open for a specific time period • - the Communicationrefers to twotypes of CF (crowd-sponsoring and crowd-lending/crowd-investing), but modelsmightevolve in the future. • - benefits (for economy, contributors and entrepreneurs) • - challenges (next slide) • - actions

  3. Key challenges for crowdfundingin the EU • - lack of transparency on the applicable rules • - market access and investor protection • - tax treatment of contributions • - lack of awareness • - possibilities for matched (public and private) financing

  4. Lack of transparency on the applicable rules – all types of CF • - anti-money laundering • - misleading advertising • - consumer protection • - intellectual property protection, where relevant • - fraud by project managers and/or platforms • - Payment Services Directive

  5. Lack of transparency on the applicablerules - financial return • - depends on the specific business model • - relevant EU regulatory framework includes Prospectus Directive, Payment Services Directive MiFID, CRD/R, AIFMD, Consumer Credit Directive, Directive on Distance Marketing of Financial Services, EVC and ESEFsRegulations • - several Member States have taken or are taking regulatory actions with regard to CF (the UK, France, Italy, Spain and Belgium)

  6. Issues for financial return CF identified by stakeholders: • - no transparency (information on investment and creditrisks) • - no advice on investment diversification • - clientmoneyprotection • - exercise of shareholdervotingrights • - threshold for prospectusrequirements • - investment limits

  7. Actions proposed in the Communication 1. The EuropeanCrowdfundingStakeholder Forum(raising awareness, provide advice and expertise to the Commission, exchange of good practices, identification of issues) 2. Studies - to examine existing national self-regulatory bodies and their rules - to explore the potential of establishing a European quality label - to exchange good practices on R&D tax incentives schemes

  8. Actions proposed in the Communication • 3. The Commission will monitor developmentsaround CF in the context of the functioning of the internal market (workshops, recommendationsthrough the Single Market Report or the Network of the SME Envoys, ifnecessary)and consideriffurther EU actionisnecessary in order for CF to flourishwhiletakingintoaccountthe interest of contributors.

  9. Thank you

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