We would like to comment on the four options and add additional comments (in German) about the legislative environment in Germany.
1) No European Framework – The Proposal suggests using the existing situation as a baseline scenario. However, it should be noted that the developments in the framework of the European Capital Market Union already impact the national Crowdfunding Regulation. Even though there is no standardized Crowdfunding Regime across Europe, the harmonization efforts of the European Union are creating a “quasi-harmonized” Crowdfunding framework, for instance in the area of Prospectus Requirements for the Issuance of Securities through Crowdfunding platforms. This will increase the threshold for the obligation to release a Prospectus for securities from 100.000 Euro to (at least) 1 Million Euro. We encourage and support the European Commission in continuously revising the MiFID framework, as it has done in the case of the Prospectus Regulation. The European Crowdfunding Stakeholder Forum should continue to be the forum for these discussions with the industry.
2) Building on Reputational Capital – A number of Crowdfunding Associations, including the German Crowdfunding Association, have created their own Code of Conducts, are monitoring the market and publishing Best Practices in Digital Consumer Protection. The German Crowdfunding Association is in discussion with other organizations representing the Crowdfunding Industry on the European level and in member states with the goal to synchronize these self-regulation efforts. Compared to other industries, the self-regulation efforts by our industry have been orchestrated in a swift and efficient way. The European Commission has recognized these self-regulation efforts. We would like to encourage the European Supervisory Bodies and their national counterparts to take the self-regulation efforts into account when developing new legislative frameworks. We support the European Commission in identifying and highlighting Best Practices in self-regulation.
3) A comprehensive EU approach – A comprehensive EU approach needs to cover three areas to be efficient: a harmonized regime for platforms, a harmonized regime for issuers and a harmonized regime relating to financial instruments, especially with reference to investor communication and protection. Even though the MiFID Regime provides a harmonized regime for passporting financial services and financial service providers, national legislators and supervisory bodies have often added additional requirements (“gold-plating”) to the European framework. which make passporting a very difficult, time-consuming and expensive undertaking. In addition we see a significant risk that a European comprehensive approach could result in a framework combining the least flexible aspects of diverse national frameworks in order to garner national support.
4) A stand-alone opt-in framework for Cross-Border Crowdfunding – This approach would leave national regulation as it is, but facilitate Cross-Border Crowdfunding through an opt-in framework. However, it could also cause an asymmetric advantage to platforms operating in more relaxed regulatory framework, due to the national supervisory body not able or not willing to monitor foreign platforms.
In the long-term, a comprehensive framework for equity-based and lending-based CF in Europe would be our preferred option. In the medium-term, a stand-alone opt-in framework could facilitate cross border activities. Due to the asymmetric regulation in Germany, our members are concerned that platforms with more flexible regulatory regimes will have a considerable advantage in Germany. We therefore would encourage the European Commission in the short-term to identify Best Practices, analyze how legislation has impacted the growth of the Crowdfunding Industry and monitor the implementation of the new rules of the European Capital Market Union closely.
The views and opinions expressed here are entirely those of the author(s) and do not reflect the official opinion of the European Commission. The Commission cannot guarantee the accuracy of the information contained in them. Neither the Commission, nor any person acting on the Commission’s behalf, may be held responsible for the content or the information posted here. Views and opinions that violate the Commission’s feedback rules will be removed from the site.