Italy: Brief Overview On The New Italian Crowdfunding Regulation

Last Updated: 20 March 2014
Article by Antonia Verna

1 Introduction

Crowdfunding is an innovative instrument to finance projects by using on-line portals as an alternative to traditional forms of financing. The public can support projects with a social purpose, as well as new entrepreneurial initiatives, by paying their contributions through on-line portals which usually operate as platforms for donation-based or social lending, or through reward based crowdfunding, depending on whether the contribution is made as a donation or loan between private individuals, or whether a reward is provided for each contributor when certain circumstances are met.

The main characteristic of crowdfunding is that each contribution is usually represented by a small amount of money. Accordingly, the more people making contributions, more the chances are that the relevant project will attract enough funds for its implementation.

The crowdfunding phenomenon is continuously evolving. Its latest form is equity crowdfunding, according to which the public can support a project by subscribing to equity securities and becoming shareholders/quotaholders in the relevant company.

In October 2012, the Italian legislator outlined some measures related to equity crowdfunding whose effectiveness has been subject to regulation by the authority responsible for the Italian securities market (Consob). The regulation was issued in July 2013; Italy is now the first country in Europe to regulate equity crowdfunding.

2 How equity-crowdfunding works under Italian law

2.1 Who are the parties involved?

According to Italian law, the equity crowdfunding mechanism is based on a four-sided relationship amongst: a) start-ups, b) investors, c) on-line portals and d) banks or investment companies.

  • Start-ups: only start-ups qualifying as "innovative" or start-ups with a social utility purpose, according to the applicable law, can launch a public offer of their own equity securities through an on-line portal.1
  • Investors: the investors who can take part in the public offer by subscribing to the start-up's equity securities can be professional investors or the general public.
  • On-line portals: only companies duly registered with a new register kept by Consob can operate as on-line portals. In order to be enrolled in this register, companies shall submit specific documents to Consob allowing the latter to verify that they meet the requirements provided by the new regulation. Companies admitted to operate as on-line portals will be subject to ongoing monitoring activity by Consob and they will not be entitled to perform any investment services, nor to take care of any payment made by the investors to finalize their subscription.
  • Banks and investment companies intending to act as on-line portals will be automatically registered in a special section of the above registry without submitting any documentation to Consob.
  • Banks/investment companies: in cases where the on-line portal is not represented by a bank or an investment company, the subscription to the equity securities and the payment of the related contributions shall be made by investors through the support of specific banks or investment companies. The on-line portal shall communicate the orders of subscription received by the investors to these institutions, and the start-up shall open its own bank account with them in order to collect the funding.

2.2 How does the operation of equity-based crowdfunding work?

The equity crowdfunding mechanism consists of the following steps:

  • Selection of the on-line portal and definition of the relevant contractual terms: a start-up intending to launch a public offer of equity securities shall select an on-line portal enrolled with Consob's special registry. It shall then provide the portal with all information concerning the offer, as well as that concerning its business and organization, to allow the latter to make the relevant assessment. The on-line portal will host the public offer and publish it on its portal on condition that it agrees with the start-up on the terms and conditions of their business relationship, and that the start-up meets the requirements provided by law, such as: (i) the public offer does not exceed, in aggregate, the value of EUR 5 million; (ii) the by-laws of the start-up provide for specific way-out mechanisms (i.e. withdrawal or tag along rights) in favor of the investors in the event that, after the subscription of the entire offer, controlling quotaholders/shareholders sell their quotas/shares to a third party; (iii) the quotaholder/shareholder agreements have been communicated to the start-up and are published on its website.
  • Launch of the public offer on the on-line portal: the on-line portal must provide investors with specific, detailed information about the start-up and the public offer (i.e. information on the project; the business plan and internal organization of the start-up; rights and duties concerning the equity securities subject to the public offer; existing provisions on the transfer limitations of such securities; information on the banks and investment companies which will take care of the payments related to each subscription; any costs to which the investors are liable; information on the professional investors already subscribed to a portion of the equity securities; information on any public offer already launched by the same start-up on other on-line portals, etc.) and such information shall be continuously updated as necessary. Such measures are designed to ensure that each investor is fully aware of the risks connected to their investment. The information reported in the public offer published on the on-line portal is not subject to any approval by Consob. Only the start-up will be liable for its completeness and truthfulness.
  • Access to the public offer and subscription to equity securities by investors: the on-line portals will allow access and subscription to the public offer only to those non-professional investors who have (i) knowledge of the information on investor education provided on the Consob website, (ii) positively answered a questionnaire attesting that the investor is fully aware of the risks connected to the investment in the start-up, (ii) declared that they are in the position to support any economic loss deriving from the investment. The non-professional investors who have subscribed to a portion of the offer will be entitled to withdraw within seven days following their subscription, or to revoke their subscription should an event occur, or an error in the information relating to the public offer appear before it is definitively closed which might have a negative impact on the decision of the non-professional investor to complete its investment.
  • Payment of contributions by investors: the on-line portal must transmit the order of subscription received by each investor to the bank/investment company which will collect the relevant contributions. The latter shall carry out its tasks in compliance with the regulation on investment services, which includes a series of disclosure duties in favour of the investors, except in cases where the value of the contribution made by each investor falls under certain thresholds (i.e. in the case of contributions made by an individual, the value of a single subscription is less than EUR500 or the aggregate value of all subscriptions made in the same year by the same person with respect to the same securities is less than EUR1000; in the case of contributions made by a company, the value of a single subscription is less than EUR5000 or the aggregate value of all subscriptions made in the same year by the same investor with respect to the same securities is less than EUR10,000). This is because, in cases of small contributions, the need to protect non-professional investors from the risks connected to the investment is not so great.
  • Closing of the public offer: to close the funding operation, at least 5% of the equity securities must be subscribed to by professional investors, banks or incubators of the start-up.

3 Some preliminary comments on the new regulation

We must highlight the missed opportunity to open equity-based crowdfunding up to any start-up, and not only to those defined as innovative or those with a social utility purpose. Indeed, during a time of crisis such as that which we are experiencing, equity crowdfunding could have been a tool for any type of start-up to raise financing from the market.

Moreover, although the main purpose of the equity crowdfunding regulation is to help newly incorporated companies to raise funds in an easy and informal way by allowing non-professional investors access to public offers, it seems to aim at protecting such investors more than simplifying and facilitating the entire process of investment.

In this respect, how can we not be critical of the provision stating that at least 5% of the shares/quotas subject to the public offer must be subscribed to by professional investors, banks or incubators of start-ups in order to finalize the funding? This is certainly a form of protection for non-professional investors but it could nevertheless risk compromising the finalization of the entire fund-raising operation.

Furthermore, according to the applicable regulation, the on-line portal is not obliged to accept any public offer submitted to its attention by any start-up even though such start-up complies with the requirements of law. Indeed, the choice made by the on-line portal is not only based on the verification that the start-up is compliant with the requirements of law, but also on discretional assessments. Consequently, it might happen that an innovative start-up does not find an on-line portal willing to public its offer. In this respect, we wonder whether it would not have been more appropriate, and in the interest of start-ups, to provide clear and express criteria of assessment to be followed by the on-line portal.

Pursuant to the new regulation, it might be argued that should a start-up reach an agreement with more than one on-line portal, the same offer will be published on different platforms. In such a case, it is not clear how such platforms will communicate amongst themselves to periodically ascertain the number of subscribers and verify whether and when the offer can be considered closed.

4 Conclusions

Notwithstanding some preliminary critical remarks, we are of the opinion that the efforts made by the Italian legislator firstly, and later by Consob, to regulate for the first time a phenomenon that is under development and is becoming widespread are to be commended.

However, we should wait for the implementation of this regulation to verify whether gaps or inappropriate rules come to the light and whether some amendments need to be introduced to facilitate and improve the use of this new instrument, particularly in light of our first comments.

Consob has expressed its willingness to review the regulation in case it proves unsuitable. We hope that Consob will keep its promise and play an active role in monitoring the effects of the implementation of this new regulation and accepting suggestions by the relevant stakeholders, as already done during the drafting phase. (Article first published in Portolano Cavallo Newsletter Inform@ Corporate, December 2013)


1 Please refer to the definition of "innovative" start-up reported in our alert on start-ups published in this newsletter.

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.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.