The EU commission has designed the Regulation to formalize the process of service provision for crowdfunding and widen the pool of investors. At the moment, some countries operate under their own regulations, which makes cross-border crowdfunding operations complex and expensive, so the new regulations are going to make things more manageable for both seasoned and new investors.
Photo credit: James ArthurEU cross-border crowdfunding regulation overview
The new European union crowdfunding regulation was approved on October 7th, 2020 and will be implemented in November 2021.
The new regulation will apply to projects raising up to 5 Million EUR over a 12 month period, which is considered to cover the needs of most SME businesses and startups. In addition, the Market regulates other projects which exceed EURO 5,000,000 in Financial Investment Directive (MiFID II) and Regulation (MiFI R).
The new EU regulation is intended to solve the differences between existing national rules (only some countries have them now) for crowdfunding, which have led to substantial compliance expenses disproportionate to the size of the investments.
According to the new rules, those Eripean Union member states with no crowdfunding regulation will apply the new Regulation from November 2021. Then, having their own crowdfunding legislation in effect, the other Member States will have a transition period until November 2022 to replace their existing regulations with the Regulation EU 2020/1503.
Photo credit: James ArthurEU cross-border crowdfunding regulation overview
The new European union crowdfunding regulation was approved on October 7th, 2020 and will be implemented in November 2021.
The new regulation will apply to projects raising up to 5 Million EUR over a 12 month period, which is considered to cover the needs of most SME businesses and startups. In addition, the Market regulates other projects which exceed EURO 5,000,000 in Financial Investment Directive (MiFID II) and Regulation (MiFI R).
The new EU regulation is intended to solve the differences between existing national rules (only some countries have them now) for crowdfunding, which have led to substantial compliance expenses disproportionate to the size of the investments.
According to the new rules, those Eripean Union member states with no crowdfunding regulation will apply the new Regulation from November 2021. Then, having their own crowdfunding legislation in effect, the other Member States will have a transition period until November 2022 to replace their existing regulations with the Regulation EU 2020/1503.
