Regulation 2020/1503 - European crowdfunding service providers for business - Main contents
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Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European crowdfunding service providers for business, and amending Regulation (EU) 2017/1129 and Directive (EU) 2019/1937| Legal instrument | Regulation |
|---|---|
| Number legal act | Regulation 2020/1503 |
| Original proposal | COM(2018)113  |
| CELEX number i | 32020R1503 |
| Document | 07-10-2020; Date of signature |
|---|---|
| Publication in Official Journal | 20-10-2020; OJ L 347 p. 1-49 |
| Signature | 07-10-2020 |
| Effect | 09-11-2020; Entry into force Date pub. +20 See Art 51 10-11-2021; Application See Art 51 |
| Deadline | 10-11-2021; See Art 12.16 And 16.3 X 20.3 X 21.8 X 28.5 X 34 10-05-2022; See Art 23.16 And 31.8 X 31.9 X 32.4 X 48.3 09-11-2023; See Art 44.2 10-11-2023; See Art 45.1 And 48.1 And 32022R1988 21-11-2023; See Art 49 |
| End of validity | 31-12-9999 |
| Transposition | 10-11-2021; Adoption See Art 50.1 10-11-2021; Application See Art 50.1 |
20.10.2020 |
EN |
Official Journal of the European Union |
L 347/1 |
REGULATION (EU) 2020/1503 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 7 October 2020
on European crowdfunding service providers for business, and amending Regulation (EU) 2017/1129 and Directive (EU) 2019/1937
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,
Having regard to the proposal from the European Commission,
After transmission of the draft legislative act to the national parliaments,
After consulting the European Central Bank,
Having regard to the opinion of the European Economic and Social Committee (1),
Acting in accordance with the ordinary legislative procedure (2),
Whereas:
(1) |
Crowdfunding is increasingly an established form of alternative finance for start-ups and small and medium-sized enterprises (SMEs), typically relying on small investments. Crowdfunding represents an increasingly important type of intermediation where a crowdfunding service provider, without taking on own risk, operates a digital platform open to the public in order to match or facilitate the matching of prospective investors or lenders with businesses that seek funding. Such funding could take the form of loans or the acquisition of transferable securities or of other admitted instruments for crowdfunding purposes. It is therefore appropriate to include within the scope of this Regulation both lending-based crowdfunding and investment-based crowdfunding, since those types of crowdfunding can be structured as comparable funding alternatives. |
(2) |
The provision of crowdfunding services generally involves three types of actors: the project owner that proposes the project to be funded, investors who fund the proposed project, and an intermediating organisation in the form of a crowdfunding service provider that brings together project owners and investors through an online platform. |
(3) |
Crowdfunding can contribute to providing access to finance for SMEs and completing the Capital Markets Union (CMU). Lack of access to finance for SMEs constitutes a problem even in those Member States where access to bank finance has remained stable throughout the financial crisis. Crowdfunding has emerged and become an established practice of funding business activities of natural and legal persons. Such funding takes place through online platforms; the business activities are typically funded by a large number of people or organisations; and the businesses, including business start-ups, raise relatively small amounts of money. |
(4) |
In addition to providing an alternative source of financing, including venture capital, crowdfunding can offer other benefits to businesses. It can validate a business idea, give entrepreneurs access to a large number of people providing insights and information, and be a marketing tool. |
(5) |
Several Member States have already introduced domestic bespoke regimes on crowdfunding. Those regimes are tailored to the characteristics and needs of local markets and investors. As a result, the existing national rules diverge across the Union as regards the conditions of operation of crowdfunding platforms, the scope of permitted activities and the authorisation requirements. |
(6) |
The differences between the existing national rules are such that they obstruct the cross-border provision of crowdfunding services and thus have a direct effect on the functioning of the internal market in such services. In particular, the fact that the legal framework is fragmented along national borders creates substantial legal costs for retail investors who often face difficulties in determining the rules applicable to cross-border crowdfunding services.... |
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