On the evening of Wednesday 18 December, the Finnish Presidency of the Council of the European Union and representatives of the European Parliament reached agreement on the proposal for a regulation to facilitate crowdfunding.
In the end, the final text provides for only minimal harmonisation of the rules, whereas the European Commission (see EUROPE 11977/3) had proposed a European passport allowing crowdfunding platforms that request it to provide their services anywhere in Europe, subject to prior authorisation by the European Securities and Markets Authority (ESMA). The co-legislators preferred to entrust the authorisation and supervision of providers of crowdfunding services to the competent national authorities.
The last major issue to be addressed in this last 'trilogue'' was the threshold for crowdfunding offers (see EUROPE 12389/20). The European Parliament was in favour of a threshold of €8 million and the EU Council wanted a gradual approach with derogations, while the EU Commission had proposed a ceiling of €1 million.
The Finnish Presidency finally obtained a revised negotiating mandate, which enabled the co-legislators to reach an agreement that now provides that the uniform rules will apply to all providers of crowdfunding services for offers of up to €5 million calculated over a period of 1 year and by the project owner. Larger transactions will be regulated by the MiFID Directive and the Prospectus Regulation.
A temporary derogation has also been added, according to two sources. It provides that, for a period of 24 months, where in a Member State the threshold of total consideration for the publication of a prospectus is below €5 million, this regulation shall apply in that Member State only to crowdfunding offers with a consideration up to the amount of that threshold.
It should be noted that the shares of certain limited liability companies, which are freely transferable on the capital markets, have also been included in the scope of the Regulation. Cryptocurrency and donations, on the other hand, have been excluded.
In return for its concession on the threshold issue, the European Parliament obtained a higher level of involvement of ESMA, which is given a role in mediating possible disagreements between different competent authorities as well as a role in the development of technical standards and in the collection of data from the competent national authorities in order to produce aggregate statistics.
The text also provides for a series of guarantees for investors. In particular, providers of crowdfunding services will need to provide their clients with clear information on the financial risks and costs they may incur.
It is also expected that investors identified as "inexperienced" will be offered more in-depth advice, alerts should their investment exceed €1,000 or 5% of their net worth, and a cooling-off period of four calendar days.
The new rules will enter into force 1 year after their adoption. The agreement still has to be validated by the two co-legislators in early 2020. (Original version in French by Marion Fontana)