Brussels, 29/09/2015 (Agence Europe) - Due to lack of harmonisation, players in participatory funding ('crowdfunding') fear an increased fragmentation of the markets along national borders.
In its action plan to make the Capital Markets Union (CMU) a reality by 2019, the European Commission will refer to participate refunding, but will not announce any decisive actions to facilitate the pan- European rise of this innovative industry, Oliver Gajda, who heads up the European network of crowdfunding companies, told EUROPE in an interview on Tuesday 29 September. “We would have hoped to have a clear vision from the EU Commission that helps guide the member states in adopting solutions to work closer with each other”, he added. He argues that in the absence of regulatory harmonisation, the industry is facing many obstacles related to “consumer protection” or “company law”, such as the rules governing the issuance of securities.
In 2014, the industry of crowdfunding, which finances the development of SMEs by granting loans or capital shares, was worth around €3 billion for a number of players estimated at 500 companies. It is particularly well-developed in the United Kingdom, France and Germany.
Under a draft version of the action plan on the CMU, the Commission states that bringing in rules on participatory funding at European level too soon could hinder the growth of this innovative source of financing. It will therefore go no further than to announce, on Wednesday 30 September, that it is to draft a report looking at the national regimes in place. After this, it will decide on its next steps.
Even so, the players of crowdfunding are not completely left out of the European regulatory framework. Platforms allowing investments in the capital of other companies can be accredited under the rules of the directive governing the financial instruments markets (MiFID) and they can be issued with a passport authorising them to provide their services throughout the EU.
Several platforms have gone down this road, said Gajda, referring to the examples of Crowdcube in the United Kingdom and Fundedbyme in Sweden. He said that it is by no means certain that these attempts will succeed due to the costs of complying with the regulatory framework and the differences in interpretation between the member states. Other companies, such as Austria's Conda, have tried to establish themselves physically on other markets, despite even higher costs. This was not a success. (Original version in French by Mathieu Bion)