Companies, Financial, Capital Markets, Crowdfunding, Proposal for a Regulation of the European Parliament and of the Council on European Crowdfunding service providers for companies

Reasons and objectives of the proposal

The Commission today adopted a package of measures aimed at deepening the Capital Markets Union and the communication “Completing the Capital Markets Union by 2019.

It is time to accelerate the realization “.

In addition to this proposal, the package includes a proposal for an EU reference framework on covered bonds, a proposal to facilitate cross-border distribution of investment funds, a proposal on the law applicable to the non-transferability to third parties of the transfer of receivables and a communication on the law applicable to the property effects of securities transactions.

This initiative is part of the creation of a Capital Markets Union, aimed at expanding access to finance for innovative companies, start-ups and other unlisted companies, which is one of the Commission’s priorities.

Currently, these companies still have difficulty accessing finance, especially when they move from the start-up phase to the expansion phase, due to structural information asymmetries.

Excessive dependence on unsecured short-term bank loans is often costly.

In addition, the 2008 financial crisis had a strong impact on bank lending volumes to start-ups and SMEs still struggling to reach pre-crisis levels, so much so that lack of funds is a major cause of start-up bankruptcy. .

These issues are amplified significantly in Member States where the capital markets and the banking system are less developed.

As a new form of financial service made possible by technology, crowdfunding can help to better match investors and business projects that need funding.

Crowdfunding platforms act as intermediaries between investors and businesses, allowing the former to more easily identify projects that interest them and support them.

Crowdfunding can become an important source of non-bank financing and thus contribute to progress towards the achievement of the overall objectives of the Capital Markets Union which aim to foster more sustainable financial integration and private investment to the benefit of job creation. of work and economic growth.

Crowdfunding is becoming more and more established within the so-called “scale of funding” (or funding escalator) for start-ups and businesses in the initial phase, usually financed by the family, by friends and through own funds, up to a phase more advanced development when venture capital funds or even private equity funds start to take an interest.

Crowdfunding can therefore be an alternative to unsecured bank loans, which are currently the main source of external financing for SMEs, especially in the initial period of activity.

COM (2018) 113 final

2018/0048 (COD)

Report and Regulations

Brussels, 8.3.2018

European Commission

Source Eur – Lex

European Union Law