Regulation (EU) 2020/1503 on European crowdfunding service providers for business, and amending Regulation (EU) 2017/1129 and Directive (EU) 2019/1937

Author (Corporate) ,
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Series Details L 347, Pages 1-49
Publication Date 20/10/2020
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Summary:

Regulation (EU) 2020/1503 adopted by the co-legislators on 7 October 2020 on European Crowdfunding Service Providers (ECSP) for Business. It amends Regulation (EU) 2017/1129 and Directive (EU) 2019/1937. This is text with EEA relevance.

Further information:

Crowdfunding improves access to funding especially for start-ups and other small businesses. A start-up can present its project on an online platform and call for support in the form of a loan ('peer-to-peer lending') or equity. Investors receive a financial return for their investment.

The proposal aims at making it easier for crowdfunding platforms to offer their services across the European Union (EU) and improve access to this form of finance for businesses in need of funding. The initiative allows platforms to apply for an EU label, based on a single set of rules. Investors on crowdfunding platform are protected by clear rules on information disclosures, rules on governance and risk management, and by a coherent approach to supervision.

Initial input for this legislative initiative on crowdfunding was gathered during preparatory work, notably during the implementation of the Capital Markets Union (CMU) Action Plan, the public consultation on the CMU Mid-term review and the consultation on FinTech. The draft law was adopted on 8 March 2018, as part of a legislative package relating to FinTech and the completion of the Capital Markets Union. The European Parliament's approved in first reading its position on the proposal on 27 March 2019 and allowed for interinstitutional negotiations on 23 September. The Council of the European Union adopted its negotiating position on 26 June. An informal agreement between the co-legislators on a compromise text was reached on 18 December. The Council endorsed it on 20 July 2020, followed by the Parliament on 6 October. The Act was signed by the co-legislators on 7 October 2020 and published by the Official Journal on 20 October.

Source Link http://data.europa.eu/eli/reg/2020/1503/oj
Related Link(s)
Commentary and Analysis
Walliance, 13/03/2018: The proposal for EU regulation on Crowdfunding: 'Pros and Cons' https://www.walliance.eu/article.html?idA=2578895841349-700
EPRS: Briefing, May 2018 : Initial Appraisal of a European Commission Impact Assessment http://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_BRI(2018)621814
EPRS: Briefing, June 2018: Establishing a basis for European crowdfunding service providers http://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_BRI(2018)621903

News
The Independent, 08/03/2018: EU proposes giving crowdfunding platforms 'passporting' rights http://www.independent.co.uk/news/business/indyventure/eu-crowdfunding-passporting-access-a8245521.html
Reuters, 08/03/2018: EU proposes crowdfunding 'passports' in boost for fintech https://www.reuters.com/article/idUSKCN1GK12G
CMS Law-Now: eAlerts, 02/04/2019: Crowdfunding: European Parliament steps up investor protection in its amendments to proposed regulation https://www.cms-lawnow.com/ealerts/2019/04/crowdfunding-eu-parliament-steps-up-investor-protection-in-its-amendments-to-proposed-regulation

Official
EUR-Lex: COM(2018)113: Proposal for a Regulation on European Crowdfunding Service Providers (ECSP) for Business http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2018:113:FIN
European Commission: Crowdfunding https://ec.europa.eu/info/business-economy-euro/growth-and-investment/financing-investment/crowdfunding
European Parliament: Legislative Observatory: Procedure File for Proposal on European crowdfunding service providers (ECSP) for business https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2018/0048(COD)
European Parliament: Legislative Train Schedule: European crowdfunding service providers (ECSP) for business http://www.europarl.europa.eu/legislative-train/theme-deeper-and-fairer-internal-market-with-a-strengthened-industrial-base-financial-services/file-crowdfunding-service-providers-for-business
European Commission: Press Release, 08/03/2018: FinTech: Commission takes action for a more competitive and innovative financial market https://ec.europa.eu/commission/presscorner/detail/en/IP_18_1403
European Commission: Fact Sheet, 08/03/2018: Frequently asked questions: Proposal for a Regulation on European Crowdfunding Services for Business https://ec.europa.eu/commission/presscorner/detail/en/MEMO_18_1423
European Commission: Opening remarks by Vice-President Dombrovskis on the Action Plans on Sustainable Finance, FinTech and a proposal for a Regulation on Crowdfunding, 8 March 2018 https://ec.europa.eu/commission/presscorner/detail/en/SPEECH_18_1701
European Parliament: Press Release, 05/11/2018: New EU rules to boost crowdfunding platforms and protect investors http://www.europarl.europa.eu/news/en/press-room/20181105IPR18253/
Council of the European Union: Press Release, 26/06/2019: Capital markets union: Council sets its position on easier access to crowdfunding platforms https://www.consilium.europa.eu/en/press/press-releases/2019/06/26/capital-markets-union-council-sets-its-position-on-easier-access-to-crowdfunding-platforms/
European Parliament: Press Release, 19/12/2019: EU rules to boost European crowdfunding platforms agreed https://www.europarl.europa.eu/news/en/press-room/20191218IPR69306/
European Commission: Press Release, 19/12/2019: Capital Markets Union and Fintech: Commission welcomes political agreement to boost crowdfunding in the EU https://ec.europa.eu/commission/presscorner/detail/en/ip_19_6829
Council of the European Union: Press Release, 19/12/2019: Capital markets union: Presidency and Parliament reach preliminary agreement on rules for crowdfunding platforms https://www.consilium.europa.eu/en/press/press-releases/2019/12/19/capital-markets-union-presidency-and-parliament-reach-preliminary-agreement-on-rules-for-crowdfunding-platforms/
Council of the European Union: Press Release, 20/07/2020: Capital markets union: Council adopts new rules for crowdfunding platforms https://www.consilium.europa.eu/en/press/press-releases/2020/07/20/capital-markets-union-council-adopts-new-rules-for-crowdfunding-platforms/
European Parliament: Press Release, 06/10/2020: Final vote on EU rules for crowdfunding platforms https://www.europarl.europa.eu/news/en/press-room/20201002IPR88439/

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