10 things you need to know about the EU Crowdfunding Regulation ((EU) 2020/1503) by Van Campen Liem attorneys at law, civil law notaries and tax advisors.
- Harmonizes requirements for all crowdfunding platforms in the EU
- Provides for a passport to operate cross-border under a home country license
- Incumbent license holders have a grace period to November 2022, Regulation enters into force in late 2021
- No license if the total consideration for the proposition is over Euro 5 million
- The platform maintains a capital reserve that is the higher of euro 25,000.-, and 25% of all (fixed) annual costs
- Payments are not allowed to be performed by the platform itself, use a licensed Payment Service Provider
- Stringent requirements regarding operations and transparency (basically a mimic of MiFID2)
- More extensive knowledge and loss absorption capability test for retail (non-professional) investors, with administrative and operational impact
- A specific investment memorandum is mandatory for each proposition, no formal regulatory approval needed
- The platform is allowed to manage individual loan portfolios and is allowed to maintain a bulletin board for investors wanting to divest
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Bastiaan Bloemink