Although the news was anticipated a few days earlier, due to a leak of information promptly reported by the main newspapers, the actual communication on crowdfunding still brings along some interesting news.
On March 27th, the European Commission (EC) published a communication on crowdfunding as part of the roadmap to meet long-term financing needs of the European economy, which aims at fostering sustainable growth in the Union.
Although the news was anticipated a few days earlier, due to a leak of information promptly reported by the main newspapers, the actual communication on crowdfunding still brings along some interesting news. The depth and breadth of the equity and debt capital markets in the United States has been a key driver of the country's economic success. By making capital available to companies of all sizes, from start-ups in Silicon Valley to blue chips on Wall Street, the U.S. system has helped fuel innovation and often given US companies an edge internationally. Through the creation of Rule 506(c) (defined below) and other changes to the rules governing capital raisings in the United States, lawmakers in the United States have sought to open the capital markets even further. The FCA has announced their regulatory approach to crowdfunding and it will have direct impact on the sector. Investors will be better protected and platforms will have to adhere to rules already commonplace within the wider financial services industry. This deliberate positioning of crowd funding within the financial services industry and not tech or social media is a good move for the sector. The fear that regulation will strangle burgeoning businesses is misplaced as most companies already work to the standards, but new entrants from the tech or social media sectors will have to structure and manage their affairs correctly. Having a global vantage point and developed operations in this market for several years now, we’ve been paying attention to several developments. One of those, has been the evolution of crowd investing applications to more professional investor audiences and sophisticated systems. At the beginning of March the Financial Conduct Authority (FCA) - i.e. the British financial authority - announced new regulations for peer-to-peer lending and equity crowdfunding, which will start to be effective from April 1st. At the beginning of March, the Commerce Minister of New Zealand presented the new regulation for securities crowdfunding, which seems to be one of the most liberal so far. Crowd Valley was a guest speaker at a seminar run by law firm K&L Gates entitled 'Crowdfunding: Commercial and Regulatory Developments' in the heart of the financial district of the City of London on March 4th. K&L Gates represents leading global corporations, growth and middle-market companies, capital markets participants and entrepreneurs in every major industry group, and it runs regular educational events on topics relating to new financial regulations. On March 3rd Crowd Valley COO, Paul Higgins spoke on a panel entitled 'Financing the Internet of Things' at the Annual Internet of Things European Summit in Brussels. Now in its fifth year, the IoT Summit is established as the leading event of its kind, bringing together key stakeholders for discussions around both the critical policy dimensions and commercial opportunities in Europe. |
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