Crowdinvesting is a relative recent phenomenon which is growing in many different countries around the world. Several people have heard about equity crowdfunding or peer to peer lending only in the last couple of years. Nevertheless, as young as it may seems, crowdinvesting, especially in the form of P2P lending, has been out in the market for while: some pioneering companies have been operating since the early 2000s, while GrowVC itself - i.e. Crowd Valley’s parent company- has been active in the online investment space since 2009. In the past few days crowdinvesting has reached a new milestone with the IPO filing of one of the most established peer-to-peer lending platform in the US.
Securities crowdfunding in Malaysia is developing incredibly fast, pushing the country in a leading position in the area. In fact, in August 2014, the Securities Commission of Malaysia (SC) launched a public consultation on proposed regulations for crowdinvesting. On that occasion, Crowd Valley published an article, explaining the drafted legal framework. Now that the public consultation is over, SC has released a document with the comments received and the changes proposed. In July 2013, Italy’s financial conduct authority (CONSOB) released one of the first national regulations for equity crowdfunding in the world. More than one year has passed since and despite the regulation being in place, the market is overpopulated with “empty” platforms, lacking a sufficient vibrance, in terms of deal flow and number of investors. In the last couple of years , while waiting for Title III to be eventually released by the SEC, several US states adopted intrastate crowdfunding laws, which allow companies to raise capital through local securities crowdfunding portals. Among them there is Michigan, whose securities crowdfunding exemption allows resident issuers to offer securities only to local investors, like it also happens in other states. Crowdfunding has started to take ground in Asia as well and the countries in the region are reacting to this innovation quite promptly. After India and Japan, it’s now Malaysia’s turn, which just released a set of drafted rules for equity crowdfunding. In the US, an “accreditated investor” is defined as the individual who 1) had High Net Worthearned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years AND reasonably expects the same for the current year; OR 2) has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence). These criteria have not changed much since the 80’s and they currently allow about 7% of the US population to be qualified as such. However, the SEC is considering to modify the definition, potentially making more stringent the requirements, which could severely hinder US early stage finance market. The crowdfunding scene in Europe is evolving fast. This year France, Spain and the UK adopted regulations for securities crowdfunding, while the European Commission officially announced its support to crowdfunding, as a valid financial source, able to help fuel Europe’s sustainable growth. In Finland, like in Sweden, the crowdfunding scene has been flourishing and active for a few years now, with more and more actors getting involved. At the beginning of July the Finnish Financial Supervisory Authority (FIN-FSA) published on its website the guidelines for securities crowdfunding in the country, which until then has been working in different ways under to the existing legal framework. According to recent forecasts, China is expected to become the largest economy in the world by the end of this year. What if securities crowdfunding is allowed there? And what if it happens even before Title III is released? In April 2014, New Zealand passed a new law, granting entrepreneurs the opportunity to use crowdfunding platforms for financial lending and borrowing purposes. The Kiwis aim to be the leading nation in Asia-Pacific for crowdfunding. But unfortunately, almost 5 months after the law has been changed, the Kiwi crowdfunding industry has been stagnate. That, however, is just about to change. |
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