The European Parlaiment approved the deal struck with the Council last December on common rules to boost EU crowdfunding platforms and protect investors.
The new rules aim to help crowdfunding services to function smoothly in the internal market and to foster cross-border business funding in the EU, by providing for a single set of rules on crowdfunding services.
Crowdfunding is increasingly popular as an alternative financing tool for start-ups as well as for small and medium enterprises at an early stage of company growth. A crowdfunding service provider operates a digital platform open to the public to facilitate prospective investors or lenders to be matched with businesses that seek funding.
The uniform set of criteria will apply to all European Crowdfunding Service Providers, ECSP, up to offers of €5,000,000, from €1,000,000 proposed by the European Commission, calculated over a period of 12 months per project owner.
The European Parlaiment said that investors would be provided with a key investment information sheet, KIIS, drawn up by the project owner for each crowdfunding offer or at platform level.
Crowdfunding service providers would need to give clients clear information about the financial risks and charges they may incur, including insolvency risks and project selection criteria.
A prospective ECSP would need to request authorisation from the national competent authority of the member state in which they are established. Through a notification procedure in a member state, ECSP would also be able to provide their services cross-border.
With this new deal, supervision would also be carried out by national competition authorities, to facilitate and coordinate cooperation between member states.