Ciaran Moloney, associate: "Regulation (EU) 2020 / 1503 ("Crowdfunding Regulation") which takes effect from 10 November 2021, is a welcome development to facilitate the integration of crowdfunding services provided across member states of the EU and one which is expected to contribute to further growth in the crowdfunding market in the EU. Crowdfunding Service Providers ("CSPs") have previously been reluctant to provide their services on a cross-border basis, owing to the significant divergence in national laws governing the activities of these entities, and the legal and administrative costs that reflect this reality. Additionally, as investors/project owners, under the Crowdfunding Regulation will not be required to be licensed as credit institutions, this is expected to make crowdfunding more cost-efficient and more attractive to investors/project owners.
For some CSPs, authorisation pursuant to the Crowdfunding Regulation, will be their first move into the regulatory environment. While existing CSPs will no doubt be comfortable with their operating processes, we expect that it is the extra expectations of the regulator which will inevitably take longer and cost more than anticipated to address. CSPs would be well advised to begin their preparations for this move without delay.
For further information on this please see our insight Crowdfunding Regulation - Cross Border Opportunities on the Horizon".
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