5.5 Policies
277. In recent years, crowdfunding has been the object of important regulatory attention in some
OECD countries. The regulatory efforts have aimed to ease the development of this financing channel,
while addressing concerns about transparency and protection of investors.
278. In the United States, where regulatory limitations had hindered the development of investment
crowdfunding, the 2012 Jump-start Our Business Startups (JOBS) Act provides explicit legal support to
investment crowdfunding, defining the rules that apply to different types of investors and companies that
campaign for funds (Box 5).
279. However, for the reform to be effective, the Securities Exchange Commission (SEC) must issue
its regulations. The first of these, in July 2013, lifted the ban on public solicitation and created a new type
of offering, called 506(c),
which allows companies to advertise that they are fundraising to the general
public, as long as they take reasonable steps to verify that the investors are accredited investors, such as
members of the Crowdfunder’s verified Accredited Investor Network31. In October 2013, the SEC
published a set of proposed requirements for the platforms, the borrowers and the investors. In particular,
platforms would be required to fully disclose their finances, loan origination and practices. Entrepreneurs
conducting a crowdfunding campaign would also need to file certain information with the SEC, provide it
to investors and the relevant intermediary facilitating the crowdfunding offering (OECD, 2014c).
280. In Europe, in October 2013, the European Commission has launched a public consultation to
explore the potential benefits, risks, and the design of an optimal policy framework to untap the potential
of crowdfunding32. In 2014, it set up the European Crowdfunding Stakeholders Forum (ECSF), an expert
group that will assist the Commission in raising awareness, promoting transparency, developing training
modules and exchanging best practices (OECD, 2014c).
281. However, in some Member States, regulators have already taken significant steps to provide a
clearer framework for the industry. In particular, Italy was the first country in Europe to adopt an ad hoc
regulation on equity crowdfunding, which came into effect in July 2013 and allows “innovative start-ups”
to raise equity through crowdfunding platforms (Box 6).
282. Equity crowdfunding is permitted in other countries, such as the United Kingdom, where, like in
the US, regulation is framed in terms of exemption to the general rule that forbids offering securities to the
general public. The exemption concerns companies that (i) produce a prospectus which is approved by an
authorised person; or that (ii) offer the shares only to “exempt persons”, such as high–net–worth
individuals/sophisticated investors or investment professionals (e.g. business angels, venture capitalists).
There is a further exemption to the rule requiring an official prospectus for the companies that raise less
than EUR 5 million, although the promotion needs to be approved by a person authorised by the Financial
Services Authority (FSA) (Collins and Pierrakis, 2012).
283. In other countries, regulatory reforms recently came into effect. In France, in 2013 some first
steps were taken by the Government and relevant authorities to develop a more favourable regulatory
framework for crowdfunding, while ensuring the security of investors. In September 2013, the French
government announced the first version of a new legal framework for crowdfunding, and launched a sixweek consultation process. This proposed framework was preceded by the creation of a specific status for
crowdfunding platforms, the “crowdfunding investment service provider” (conseiller en investissements
participatifs). Also, in May 2013, guidelines on crowdfunding were issued, by the French Autorité des
Marchés Financiers (AMF) and Autorité de Contrôle Prudentiel et de Résolution (ACPR), which require
crowdfunding platforms to be authorised as either a payment service provider, an investment service
provider or a credit institution. As of 1 October 2014, the new regulatory framework on crowdfunding
came into effect. For P2P lending, this establishes an upper limit of EUR 1 million for the funds that can be
raised for a single project. If an interest is charged, retail investors can lend up to EUR 1,000, per borrower
and per project, and the loan term cannot exceed 7 years. In the absence of interest, the loan limit is
extended to EUR 4,000. The new rules also establish some minimum requirements for the contracts and
obligations for the platforms to disclose information on their status and on the criteria for selecting projects
and entrepreneurs, intended to increase transparency in the market, The law also requests platforms to
provide investors with instruments that may assist them in evaluating their financing capacity33.
284. Public action may also take the form of support to industry networks or aim at improving
information about crowdfunding opportunities. For instance,
Bpifrance has taken an active role in
supporting crowdfunding, by launching in 2013 a crowdfunding portal (http://tousnosprojets.bpifrance.fr).
This works as a search engine for crowdfunding platforms, which are selected by bpifrance and engage in
respecting regulation and promoting good practices. The site intends to strengthen industry networks and
make investment easier for the large public, which can select projects through a simple interface. Bpifrance
simply manages the platform and does not intervene in the design/selection of projects or in the fundraising
process.
