The European Securities and Markets Authority has written to the European Commission urging clarificiation of some important interpretation issues relating to the EU Crowdfunding Regulation and suggesting a 'slight delay' to the proposed implementation date of 10 November 2021 to ensure that all the key technical standards are available to applicants and national authorities. 

If you require assistance in preparing an application for authorisation under the EU Crowdfunding Regulation, please get in touch.

Interpretation Issues

The interpretation issues identified by ESMA in its letter and explained in the Annex relate to: 

  1. the transitional period for crowdfunding services already offered under national laws;
  2. the meaning of ‘business activity’ in the definition of ‘crowdfunding project’ ("the business activity or activities for which a project owner seeks funding through the crowdfunding offer");
  3. the legal status of the provision of ‘individual portfolio management of loans’;
  4. the extent to which non-sophisticated or non-sophisticated investors must not be be prevented from investing in crowdfunding projects;
  5. the scope of the prohibition against a crowdfunding service provider paying or accepting remuneration, discounts or non-monetary benefits for directing investors' orders to a particular crowdfunding offer;
  6. the respective responsibilities of crowdfunding service providers and project owners for the content of the 'key investment information sheet'.

Delaying the implementation date

ESMA says it is on track to submit its technical standards before 10 November, including some that are only due by May 2022. But it believes that the full endorsement process won't be concluded before 10 November 2021. That means the Regulation would begin to apply before the technical standards are finally adopted, raising harmonisation and 'level playing field' issues and making the authorisation process more complex. Therefore, ESMA suggests "slightly delaying" the implementation date to enable a more orderly and harmonised application of the regime. The length of the potential delay is currently unclear.

If you require assistance in preparing an application for authorisation under the EU Crowdfunding Regulation, please get in touch.