Hey You – Rules
EU Regulation 2020/1503 introduced a single and harmonized regulatory framework for crowdfunding services within the European Union. This has led to a series of significant innovations, both for platforms and users.
Clear and unambiguous definitions:
The regulation provides precise definitions of key concepts related to crowdfunding, such as “crowdfunding service provider”, “crowdfunding project” and “investor”. This helps to create a common language and facilitate understanding of the rules.
Authorization requirements:
Crowdfunding platforms are subject to specific authorization and supervision requirements by the competent national authorities. This ensures a higher level of protection for investors and helps to strengthen confidence in the market.
Transparency and information to investors:
The regulation requires platforms to provide investors with clear, complete and up-to-date information on projects, related risks and investment methods. In addition, it is mandatory to make a summary information document (KIIS) available to potential investors.
Investor Protection:
The regulation introduces a series of measures aimed at protecting investors, such as limits on investable amounts, obligations to assess the suitability and appropriateness of investments, and competence requirements for crowdfunding service providers.
Continuous monitoring:
The platforms are required to constantly monitor investment activity and report any suspicious transactions to the competent authorities.
Marketing communications:
The regulation states rules about marketing communications relating to crowdfunding services, in order to avoid unfair and misleading commercial practices.
Main innovations introduced by EU Regulation 2020/1503:
Increased Confidence:
The more stringent regulatory framework helps to strengthen investors’ confidence in crowdfunding, making it an increasingly widespread and accepted form of financing.
Same level of protection across the EU:
Thanks to the regulation, European investors benefit from a uniform level of protection, regardless of the Member State in which the platforms operate.
Market Development:
The regulation creates a stable and predictable regulatory environment, fostering the development of the crowdfunding market in Europe.