Ireland: The Regulation Of Crowdfunding In Ireland

What is Crowdfunding?

Crowdfunding involves individuals and businesses, in particular start-ups and SMEs, raising finance, usually in small monetary amounts from multiple sources, rather than by means of traditional bank finance. It is generally carried out via online platforms which match individuals or businesses seeking finance with potential investors or lenders. These online platforms also arrange for the payment and repayment of such investment.

The Benefits and Risks of Crowdfunding

Crowdfunding is an innovative and relatively quick and cost efficient method for raising capital. Given that crowdfunding platforms are almost invariably online, unlike banks, they require no physical presence in the area in which they operate, resulting in low overhead costs. These cost savings can be passed on to both the borrower and the lender. In addition, crowdfunding is a particularly useful means for SMEs and start-up companies to access finance in circumstances where they may find it difficult to raise capital via traditional methods.

There are also a number of risks associated with crowdfunding as a method of raising finance. For example, crowdfunding platforms are exposed to possible fraud by individuals who offer fake or misleading investment opportunities online. It can be difficult for lenders to obtain accurate and independent information regarding the reputation of any particular investment as there are no mandated disclosure requirements. Moreover, there is a lack of any adequate complaints process to, for example, a statutory body, meaning that a disgruntled party may be left without any dispute resolution process and without receiving adequate redress. The absence of prudential requirements means that investors have increased risk of exposure in the event that the platform fails.

Crowdfunding at an EU level

According to a report published by the European Commission in September 20151, crowdfunding projects were ongoing in every Member State during 2013 and 2014. Many EU countries, such as the United Kingdom, Germany and France have introduced domestic legislation in this area. However, there is currently no legislation specifically aimed at regulating crowdfunding at an EU level, nor does the European Commission have any immediate plans to introduce any legislation in the area. This position seems to be based on the fact that, at present, there is very little EU cross-border crowdfunding activity. However, earlier this year, in the context of its mid-term review of the Capital Markets Union, the European Commission indicated that it will continue to monitor developments in the industry, to evaluate whether any necessary EU regulatory action may be needed in the future. Both the European Securities and Markets Authority and the European Banking Authority have expressed the view that a review of the possibility of introducing some legislation in this area at an EU level would be desirable.

Regulatory position in Ireland at present

Crowdfunding is a relatively new and expanding industry in Ireland and is not regulated unless the crowdfunding platform also carries out some other related regulated services, such as payment services or MiFID investment services. In 2014, the Central Bank of Ireland issued a consumer notice, the purpose of which was to warn consumers about the lack of regulation in the industry and to highlight the possible risks associated with crowdfunding faced by potential investors.

Pursuant to the International Financial Services 2020 Action Plan 2017, the Irish government committed to undertake a public consultation on crowdfunding in the context of the European Commission's Action Plan for the establishment of a Capital Markets Union. In April 2017, the Department of Finance (the "Department") issued a consultation paper and commenced a public consultation on the regulation of the area in Ireland. The consultation will run until 2nd June, 2017.

The Consultation Process

The objective of the consultation process is to gather the opinions of interested parties in relation to the possible regulation of the crowdfunding sector. The consultation aims to ascertain whether regulation would serve to benefit this emerging industry or whether it would inhibit the future development of the area. Interested parties are invited to submit their views on a number of issues, including:

  1. consumer and investor protections, such as whether (i) the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations, 2015 should apply to crowdfunding; (ii) there should be certain restrictions on retail investors investing in crowdfunding business; and (iii) crowdfunding platforms should be the subject of prudential rules such as in relation to conduct of business and capital and liquidity requirements;
  2. crowdfunding as a viable alternative source of finance and its potential implications for financial stability; and
  3. the costs and benefits of a regulatory regime for crowdfunding, bearing in mind the risk that unsuitable regulation could hinder innovation and impede the growth of the crowdfunding industry if the financial cost of compliance with regulation for crowdfunding platforms is too high.

The paper also requests the views of participants on whether, in circumstances where the decision is made not to regulate the area, non-regulatory incentives / supports should be put in place to further promote crowdfunding as a source of finance in Ireland.

The Department has also invited interested parties to submit their views on existing EU financial services legislation (such as the MIFiD, the Alternative Investment Fund Managers Directive and the Payment Services Directive) in terms of how this legislation applies to online crowdfunding platforms in Ireland.

Next Steps

Following the end of the consultation period, the Department will evaluate the submissions made by interested parties and these will be used to inform future regulatory development of crowdfunding in Ireland.


1 European Commission, 'Crowdfunding: Mapping EU markets and events study', 2015.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions