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

France's First Steps towards a Crowdfunding Regulation 

10/14/2013

 
Picture
Securities Crowdfunding Mobilizes Europe
With Italy adopting a regulation for equity crowdfunding, with the UK dictating the best-practices for this new financial sector and with the European Commission launching together with the Europe Crowdfunding Network a public consultation on crowdfunding, a lot has lately been moving in Europe’s securities crowdfunding scene.

The climate of fervor and enthusiasm for this new financial sector has rapidly spread to other European countries too, inducing their governments to start considering the topic. Among these, the French government has announced, at the beginning of the past month, its intention to introduce a regulation to support the development of the securities crowdfunding sector, while at the same time ensuring the security of the investors.

Securities Crowdfunding in France

In France, today, running an equity or lending crowdfunding website means complying with very stringent economic and legal requirements, that make it very complicated and almost inconvenient. For instance, since only  banks are allowed to lend to businesses, a French lending crowdfunding platform must have a high enough capital threshold to be recognized by the financial authority as a credit institution. In a similar way, equity crowdfunding platforms have to meet specific capital requirements and comply with highly restrictive rules to prevent money laundering and other kinds of crimes. In addition to all this, there is a rule that imposes that a maximum of 149 investors can ask information on a specific investment, thus clearly limiting the potential of crowdfunding.

Credit to: miltonowens.wordpress.com
This situation, combined with a widely shared feeling of the necessity to take action to give a breath of fresh air to the French  startups, pushed the main actors in the country’s crowdfunding scene to get together and lobby the government. Their lobbying activity, aiming to obtain a regulation that could facilitate the development of the local crowdfunding market, gave the first results in September, when the minister of Economy and Finance announced that it will be created a specific status -i.e. “crowdfunding investment service provider” - for securities crowdfunding organizations. On the 30th of September, following the aforementioned announcement, the French minister for SMEs presented the proposal to create a regulation for securities crowdfunding and launched a six-weeks public consultation.

France has thus taken the first steps to support the development of the securities crowdfunding market, showing to well respond to the needs deriving from the current situation, which demands each government to recognize the paradigm shift that crowdfunding is bringing along and get ready to it.

References

Daniel, A. Debunking the French Government’s recent proposals to define crowdfunding: What is and isn’t being regulated. 2013. Rude Baguette.com

Weverbergh, R. Legal hurdles hod crowdfunding in France back. 2013. Whiteboardmag.com

Photo Credit: Moyan Brenn: https://bit.ly/p/8YRU4e


Picture
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.





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.