If initially European authorities openly demonstrated curiosity and interest towards this new financial tool, which led many to think they would have taken action soon, recently the enthusiasm seems to have lowered. And this is probably not because they don’t see potential in the sector, rather because as Mr. Hill told to CNBC “my instinct with crowdfunding is this is something that's emerging rapidly…and I think we've got to be careful not to regulate too soon on something like that, that might actually have the unintended effect of choking off that growth".
The words of Commissioner Hill made clear that the European Commision is not planning to intervene soon on the online investing market, which they prefer leaving free to evolve and develop before they take any serious action. This liberal approach has worked well in the UK, where the market grew up unregulated until recently, when the Financial Conduct Authority understood it reached a dimension that demanded its intervention. In other cases, like Italy’s, indeed a too early regulamentation seems to have contributed to slow the local crowdfunding market growth.
However, by not intervening at this stage, the EC leaves local regulators free to act, which means that each one will continue to follow its own legal approach and that the European market will stay fragmented for another while.
About the author - Irene Tordera
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.