The Portuguese financial markets authority, the Comissão do Mercado de Valores Mobiliários (CMVM), released a draft of the proposed rules for equity and lending crowdfunding, joining another seven European countries who adopted an ad hoc legal framework for this source of finance. The proposed regulation includes the following main points:
- Retail investors can invest up to €3,000 per project and a total of €10,000 per 12-month period.
- Professional investors, instead, defined by CMVM as those individuals with an annual income equal or higher than €100,000, have no limit on the amount they can invest via equity or lending crowdfunding.
- Fundraising companies and projects can raise up to €1 million in a given year, unless the offer limited to professional investors only, in which case the cap is moved up to €5 million.
- Crowdfunding platforms have to register with CMVM and are required to be endowed with a minimum capital of €50,000 or, alternatively, a liability insurance covering for that amount. In addition to that, portals have to make available various information on the fundraising projects in order to comply with transparency and anti-money laundering requirements.
The draft document is available for public consultation until the 21st January 2016.
Overall, Portugal’s regulation for crowdfunding shares many similar aspects with the one of neighboring Spain, but also of other EU countries. ECN welcomes that the Portuguese legal framework for crowdfunding is creating a first legal assurance for investors and market alike. We also welcome the fact that it has been created keeping into account what has been done in other European markets too. Nevertheless, there are still many aspects, such as limitations on investment amounts for private investors, which ECN hopes can be adjusted with prudence to allow private investors to benefit from the opportunities crowdfunding can offer adequately. In addition, the differences among national regulations remain obstacles in the development of pan-European crowdfunding. This must be addressed also at EU member state level in sight of the Capital Market Union. ECN and its members have been engaging and will keep engaging with national authorities to guarantee an ongoing dialogue among themselves and with EU institutions and other international stakeholders, in order to encourage to look at the larger picture: Europe.