Follow us on
Difitek
  • News
  • What We Offer
  • Contact Us
  • Visit our Site

European Commission is "unleashing the potential of Crowdfunding"

5/6/2014

 
Picture
March 27th 2014 was a triumphant day in the world of crowdfunding when the European Commission (EC) issued “Unleashing the potential of Crowdfunding in the European Union”; the first Communication publishing of its nature within the EU. We first introduced this topic issue March 31st (link here), and we will now take a closer look into the implementation of regulations by the EC. 




By 2015, the EC has announced it would like to accomplish these set priorities:

  •  carrying out a study to explore market developments and the potential of crowdfunding to finance research and innovation;

  • raising awareness, providing information and training modules for project owners, especially for 'financial return' crowdfunding (crowd lending and crowd investing);

  • establishing an expert group, called the European Crowdfunding Stakeholder Forum, that will advise the Commission on some of the above actions. In particular, the Expert Group should provide advice to the Commission to explore the potential of establishing a “quality label” to build trust with users and provide expertise to the Commission in promoting transparency, best practices and certification;

  • assessing the possibilities for using public funds to support projects through crowdfunding;

  • holding regulatory workshops with national regulators to discuss obstacles to the convergence of national regulations on 'financial return' models and, where relevant, issuing recommendations to encourage Member States to avoid inconsistencies in national approaches, and to monitor the market and legal developments and regularly assess whether further EU action is needed.

The European Crowdfunding Network (ECN) has been, since 2012, lobbying with the EC to help advise and influence policy developments and regulation reviews. The ECN has reviewed the communication as being “fully in line with our previously announced expectations and requests to the European Commission.” The group will continue to work with the EC and will concern themselves with making sure that policies are timely and implemented effectively.

Though this is a great step forward in the European Crowdfunding sector, it was announced in November that, on the European level, there would be no further additional regulations for the time being. This decision will positively impact the market’s establishment of best practices and development. It will also allow provision and encouragement for EU members that have not taken advantage of crowdfunding to do so within their own national boundaries. Having said that, the lack of emphasis on regulation will potentially make national regulations incompatible across the EU, causing uneasiness for investors, SMEs and startups, and the platforms themselves.

The ECN has published several scenarios:

  • UK and Spain may have a reduction in crowdfunding innovation, in the worst case scenario as there are hurdles for market entry and the customer is heavily protected by law. 

  • France will be expected to have a vibrant crowdfunding scene, because the French government has proposed promising regulations. 

The EC will continue to monitor the developments of the industry, and consider if further regulatory actions should occur to limit national fragmentation from the single EU market. In order for the EC to make more proper and well informed decisions and regulations, and informal expert group on crowdfunding will be established. 

Crowd Valley is proud that one of our founding and board members is part of the Access to Risk finance expert group, assisting in advising the Commission on a broad range of issues encompassing the design and implementation of debt and equity financial instruments, target groups, SME participation and other cross-cutting issues.

References: 
ENC Admin. (2014) European Commission announces help for Crowdfunding. Europecrowdfunding.org

Alois, J. (2014) European Commission Creates Expert Group on Crowdfunding. Crowdfundinsider.com

ECF. (2014) Communication on Crowdfunding in the European Union. Efc.be

Photo Credit: Blu-news.org 

Picture
About the author - Jasmien Cels

Jasmien is currently studying a bachelors in Business Studies from Cass Business School in London while interning at Crowd Valley. Originally from Belgium, she grew up in Switzerland, Ethiopia, USA, and Japan. 

She is very passionate about the start-ups, entrepreneurship, technology, and travelling; she aspires to one day become an entrepreneur. 





Comments are closed.

    RSS Feed

       

    Categories

    All
    All Sectors
    Americas
    API
    Asia
    Australasia
    Clean Energy
    Crowd Valley
    CTO Blog
    Difitek
    Equity Investment
    Europe
    Events
    Expert Analysis
    Fintech
    Global
    Interview
    Lending
    Local Funding Network
    Marketing
    Market Watch
    Oceania
    Platform Updates
    Presentations
    Press Release
    Real Estate
    Regulations
    Russia
    Social Capital
    Webinar

Back to Difitek website


Copyright 2018 Crowd Valley Inc. 
All Rights Reserved.

Crowd Valley does not engage in the offer, sale or transfer of securities and securities may not be offered, sold or transferred via this website. Securities may not be offered or sold in the United States absent (i) registration under the U.S. Securities Act of 1933, as amended (the Securities Act) or (ii) an available exemption from registration under the Securities Act. Please consult legal counsel in the appropriate jurisdiction before offering, selling or buying securities as registration under the Securities Act or similar state legislation may be required.

Please note that the provision of the information on this website does not create and is not intended to create a relationship between Crowd Valley Inc. and any other person. You are not and should not regard yourself as being a client or customer of Crowd Valley Inc. and must not expect Crowd Valley Inc. to have any duties or responsibilities to you, act for you or your clients, or be responsible for providing protections afforded to customers or yourselves or be responsible for advising you in any respect.