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.
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.
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
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.