On 26 May 2023, ESMA updated its Questions and Answers ("Q&As") in relation to Regulation (EU) 2020/1503 of 7 October 2020 on European crowdfunding service providers for business (the “Crowdfunding Regulation”). Three new questions and answers have been added to the Q&As.
In this latest update, ESMA clarifies the following with respect to the use of special purpose vehicles ("SPVs"):
- an entity should be considered as an SPV within the meaning of Point (q) of Article 2(1) of the Crowdfunding Regulation when it is (i) created for the purpose or used for the purpose of the transaction (i.e. financing of the project) and (ii) separated from the project owner, is (iii) interposed between the crowdfunding project and investors and (iv) this entity receives, directly or indirectly, from the project owner a transfer of legal title or beneficial interest over the crowdfunding project;
- noting that Article 8(1) of the Crowdfunding Regulation provides that crowdfunding service providers (“CSPs”) shall not have any participation in any crowdfunding offer on their platform, the holding by a CSP of a participation in a SPV or any other entity interposed between the crowdfunding project and investors is not possible under the Crowdfunding Regulation, unless it is demonstrated by the CSP to the national competent authority that such participation does not equal a participation in the underlying crowdfunding offer and, as such, does not impair its neutrality vis-à-vis its clients. The Q&A also provides criteria by which the national competent authority may consider that a participation taken or held by the CSP does not equal a participation in the underlying crowdfunding offer and that the neutrality of the CSP is not impaired.
As regards the authorisation and supervision of CSPs, ESMA provides some further explanation on the proofs of own funds that existing undertakings can provide to the relevant authorising authority when applying for authorisation as a CSP, for the purpose of Point (i) of Article 12(2) of the Crowdfunding Regulation and Field 10 of the Annex to the Delegated Regulation 2022/2112.
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