FRANCE

France adopted specific regulation on crowdfunding in 2014. The new regulation created two different statuses, the Conseil en Investissement Participatifs (CIP) and the Intermédiare en Financement Participatif (IFP).

To operate under this regime, crowdfunding platforms need to register with ORIAS (Registre unique des Intermédiares en Assurance, Banque et Finance) and comply with specific rules depending on their status.

To become an IFP, a platform must present guarantees on the competence and experience of its team, be in posseion of an insurance policy and abide by a code of conduct. Via IFP, projects can only seek a total of 1 million euros each. For interest free investment offerings, individual investors can only lend up to 5,000 euros per year and per project; the limit for individual investors is set to 2,000 euros per year and per project for interest bearing offerings.

To qualify as CIP, the platform must be a member of an AMF accredited association, which has supervision powers over the platform. The platform must also have an insurance policy in place and prove the experience and competence of its team. CIP platforms can seek a maximum of 2.5 million euros in funding per project.

In 2015, 2.3 million people used crowdfunding platforms to support projects in France, enabling the financing of 18,000 projects with a total of 300 million euros.

A label was created to identify platforms in compliance with French legislation:

More information (in French):

• Banque de France
• Autorité des Marchés Financiers

Legislation (in French):

• Décret n° 2016-1453 du 28 octobre 2016 relatif aux titres et aux prêts proposés dans le cadre du financement participatif
• Ordonnance n° 2014-559 du 30 mai 2014 relative au financement participatif
• Décret n° 2014-1053 du 16 septembre 2014 relatif au financement participatif
• Arrêté du 22 septembre 2014 portant homologation des modifications du règlement général concernant le financement participatif
• Arrêté du 30 septembre 2014 relatif à la capacité professionnelle des intermédiaires en financement participatif
• Arrêté du 24 septembre 2014 portant homologation des statuts de l’organisme en charge de la tenue du registre unique des intermédiaires en assurance, banque et finance
• Arrêté du 24 septembre 2014 modifiant l’arrêté du 20 décembre 2012 fixant le montant des frais d’inscription annuels au registre unique des intermédiaires mentionnés à l’article L. 546-1 du code monétaire et financier

GERMANY

The Retail Investors’ Protection Act, which provides the framework for equity-based crowdfunding, entered into force in July 2015.

To operate, crowdfunding platforms need a licence either under the German Trade, Commerce and Industry Regulation Act (Gewerbeordnung), under the German Banking Act (Kreditwesengesetz) or the German Securities Trading Act (Wertpapierhandelsgesetz).

The total investment per investor is limited to EUR 10,000, however, for investments over EUR 1,000 investors must provide assurances that their disposable assets are greater than or equal to EUR 100,000 or that they are investing less than twice their monthly net-income. The entities asking for financing must publish a document with essential information about the investment product.

More information:

• BaFin
• BaFin (in English)

Legislation (in German):

• Kleinanlegerschutzgesetz vom 3 Juli 2015

PORTUGAL

Crowdfunding has been regulated since July 2015, but the framework has not yet entered into force due to a lack of regulation by the national authority, which has powers to licence and supervise crowdfunding platforms.

The new law foresees that equity and lending crowdfunding models fall under the authorisation and supervision of the securities market regulator, the Comissão do Mercado de Valores Mobiliários (CMVM). To complete the legal framework regulation for crowdfunding in Portugal, CMVM is expected to publish a code of conduct for platforms in early 2017.

Amongst other prerequisites, the CMVM requires proof of professional conduct and board member experience as well as at least EUR 50,000 in capital to register a platform.

The maximum amount allowed for project financing via crowdfunding is EUR 1 million for private investors or EUR 5 million for professional investors. Private investors may only invest a maximum of EUR 3,000 per project and a total of EUR 10,000 per year. Companies, individuals with a yearly income superior to EUR 70,000 and professional investors are exempt from these limits. Project promoters must publish a document with key information for investors.

More information (in Portuguese):

• CMVM

Legislation (in Portuguese):

• Lei n.º 102/2015, de 24 de Agosto Regime jurídico do financiamento colaborativo
• Regulamento da CMVM n.º 1/2016

SPAIN

Crowdfunding has been regulated in Spain since April 2015. A new law on equity and debt crowdfunding platforms regulates protection mechanisms for investors based on registration requirements, information to investors, rules of conduct for platforms and investment limits.

To operate, crowdfunding platforms must be registered with the Comisión Nacional del Mercado de Valores or the Banco de España. To register, platforms need EUR 60,000 in capital and liability insurance.

The Spanish crowdfunding regulation distinguishes between qualified and private investors. Qualified investors need to prove a total income of over EUR 50,000 per year or assets of over EUR 100,000. Qualified investors can invest more than EUR 3,000 per project or EUR 10,000 per platform annually. Private investors, those with annual incomes lower than EUR 50,000, are limited to investments EUR 3,000 or less per project.

More information (in Spanish):

• CNMV

Legislation (in Spanish):

• Ley 5/2015, de 27 de abril, de fomento de la financiación empresarial

UNITED KINGDOM

The Financial Conduct Authority set up a legal framework for peer-to-peer lending and investment based crowdfunding in 2014.

A loan-based platform must comply with a minimum capital requirement equal to a percentage of the volume of loans or a fixed minimum of GBP 50,000 (whichever is larger). To be authorised, such platforms must also comply with the standards set out by the FCA and develop a plan for loan repayment should they face difficulties.

An investment based crowdfunding (debt or equity) platform must also be authorised by the FCA and has to set up a sorting mechanism to screen retail from professional investors. Non-professional investors may not invest more than 10% of their assets.

More information:

• FCA
• FCA - Policy Statement on Crowdfunding

Legislation:

• FCA Handbook - CASS

THE NETHERLANDS

The Netherlands Authority for Financial Markets (AFM) is the national regulator for crowdfunding activities. To operate, platforms need to apply for a licence or a licence exemption with AFM. Platforms must provide information on their activities to AFM twice a year.

Investors are tested to assess both their knowledge of the risks involved with investing through crowdfunding as well as whether the investment is sound taking the investor’s assets into account. Platforms must analyse whether the amount invested makes up a reasonable portion of a private investor’s available assets. Platforms must perform this test prior to the first investment should the amount to be invested exceed EUR 500. New tests are to be performed for investments over EUR 5,000 and upon multiples of EUR 5,000 thereafter.

In April 2016, new rules entered into force limiting the investment amount allowed for retail investors. The limits are now set at EUR 40,000 per retail investor and platform for equity investments and EUR 80,000 per retail investment and platform for loan-based investments. These rules double the initial investment limits set in 2014.

More information (in Dutch):

• AFM

Legislation (in Dutch):

• Besluit van 18 februari 2016 tot wijziging van het Besluit Gedragstoezicht financiële ondernemingen Wft, het Besluit bestuurlijke boetes financiële sector en enige andere besluiten op het terrein van de financiële markten (Wijzigingsbesluit financiële markten 2016)