On 19 November 2021, ESMA updated its Questions and Answers ("Q&A") in relation to Regulation (EU) 2020/1503 of 7 October 2020 on the European crowdfunding service providers for business (the “Crowdfunding Regulation”).
In addition, on 10 November 2021, ESMA published its final report (the "Final Report") on the draft technical standards under the Crowdfunding Regulation.
Crowdfunding Regulation Q&A
Six new questions split across four different categories were added with the European Commission providing all answers, confirming the following:
- Question 2.1 (Transitional period) - "national law" applicable during the transitional period can be either a specific crowdfunding regime or applicable legislation or the private law applicable to crowdfunding services in the Member State.
- Question 3.1 (General provisions) - the concept of "business activity" within a meaning of crowdfunding project is interpreted in a broad sense.
- Question 3.2 (General provisions) - individual portfolio management of loans remains in the nature of service that facilitates the granting of loans. The Crowdfunding Regulation imposes additional requirements over a minimum set of standards, which are applied to providers of facilitation of granting of loans.
- Question 4.1 (Provisions of crowdfunding services and organisation and operational requirements) - the concept of "routing of orders" means any form of practice to direct prospective investors to a particular offer, unless that practice is based on objective criteria that are disclosed ex ante (such as filtering or search engines).
- Question 5.1 (Investor protection provisions) - second subparagraph of Article 21(6) of Crowdfunding Regulation shall not apply to Article 21(7) of the Crowdfunding Regulation.
- Question 5.2 (Investor protection provisions) - the project owner is the one ultimately responsible for the information provided in the key investment information sheet, while the crowdfunding service provider is responsible for the procedures in place to verify that the information provided is complete, correct and clear.
Crowdfunding Regulation Final Report
The Final Report contains:
- the draft regulatory technical standards ("RTS"), and
- the draft implementing technical standards ("ITS"),
on a variety of topics connected to the Crowdfunding Regulation.
The Final Report has been submitted to the European Commission for adoption who shall take a decision, within three months, on whether to adopt these RTS and ITS.
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