The European Commission has published today its report on the EU crowdfunding sector, part of the Capital Markets Union Action Plan. The European Crowdfunding Network (ECN) welcomes the continued committment of the European Commission to crowdfunding.
The paper frames the current status of crowdfunding in Europe and its developments, in terms of business models, national regulations and European level initiatives. In particular, key highlights of the report include the following:
- the Commission acknowledges that the crowdfunding market is developing rapidly and if appropriately regulated, it has the potential to be a key source of financing for SMEs over the long term.
- cross-border project funding is still limited and crowdfunding remains a regional or local phenomenon to a large extent, partly due to bespoke national regulation.
- self-regulations initiatives, especially the ECN Code of Conduct, are positively looked at as an addition to existing regulations.
When looking at the future of the sector, EU Commissioner for Financial Stability, Financial Services and Capital Markets Union, Jonathan Hill commented: “As part of our work to improve the funding conveyor belt for businesses, we are keen to support the development of crowdfunding models as a source of financing for entrepreneurs with bright ideas, start-ups and other SMEs. Our focus is on promoting best practice, appropriate investor protection and consistency of national regimes. We will continue to monitor market and regulatory developments closely.”
On a practical level, the European Commission will keep developments in the sector under review, and meet twice per year with regulators and the sector. This will ensure the Commission is able to respond in a timely manner if further steps to support regulatory convergence are needed, both to promote the development of the sector and to ensure appropriate investor protection. It will also undertake additional intiatives to promote its Crowdfunding Guide and the sector.
The European Crowdfunding Network welcomes the work and efforts of the European Commission in understanding and closely monitoring the crowdfunding sector. ECN Executive Director commented: “ECN welcomes the communication by the European Commission as a sign of ongoing engagement with crowdfunding and understanding of its relevance as a source of alternative finance for SMEs. We remain concerned about increasing fragmentation of the European market through national regulation.”
ECN will keep working to promote self-regulation and transparency in the crowdfunding sector and will continue its close collaboration with the European Commission and other EU institutions in dissiminating best practice, investor protection and creating harmonisation of national regimes.
Read the Commission’s report on crowdfunding here.
“ECN has been working with its partners over the past year to support the Capital Market Union, you can find some of our public statements here:
‘Increased Equity Market Financing’ with FESE, EuropeanIssuers, Invest Europe, Better Finance, AFME, EBF, EFAMA
‘Joint Declaration on Capital Markets Union’ with AFME, EBF, Eurochambres, EuropeanIssuers, EBN, EBAN and BAE
‘United for SMEs in the Capital Markets Union’ with UEAPME, EFAA and Leaseurope
‘President Juncker, Let’s Create an E-Zone for Europe’s Innovators, Entrepreneurs and Investors’ with EBAN, EBN, ELITE, EIF, BAE and YES