Recent updates to the European crowdfunding service providers for business (Crowdfunding Regulation) include (i) measures extending the transition period by 12 months for firms providing crowdfunding services under national law and (ii) the publication of technical standards.
Transition period extension
On 19 May 2022, following targeted consultations, ESMA provided technical advice to the European Commission recommending an extension of the transition period under the Crowdfunding Regulation.
On 12 July 2022, the European Commission adopted a Delegated Regulation under the Crowdfunding Regulation, proposing to extend the transition period by 12 months for firms providing crowdfunding services under national law. This would allow such firms providing crowdfunding services on 10 November 2021 to continue to provide those services on a transitional basis until 10 November 2023.
Technical Standards
On 13 July 2022, the European Commission adopted 11 Delegated and Implementing Regulations (consisting of seven sets of regulatory technical standards (RTS) and four sets of implementing technical standards (ITS)) under the Crowdfunding Regulation.
The technical standards relate to the following:
- Conflicts of interest.
- Loan default rate calculation.
- Business continuity planning.
- Reporting information on projects funded.
- Co-operation and information exchange between competent authorities.
- Key investment information sheet.
- Complaints handling.
- Entry knowledge test and simulation of the ability to bear loss.
- Notification of national provisions concerning marketing requirements.
- Co-operation and information exchange between competent authorities and ESMA.
- Information exchange between competent authorities for investigation, supervision and enforcement.
Level 2 measures are subject to European Parliament and EU Council scrutiny before being published in the Official Journal of the European Union.
For further information on the EU regulatory regime on crowdfunding, please see our January 2021 briefing by clicking the image below.
Contributed by Jane Balfe
