The European Crowdfunding Network aims to improve crowdfunding opportunities for both individuals and companies, enabling European businesses and development projects to prosper and grow. Taking into account discussions in progress at the European Commission and other relevant pan-European institutions, ECN platform members have asserted a collective view that high and professional standards of transparency are just and equitable principals and will contribute to the development of crowdfunding in Europe. Hence, they have decided to establish a non-binding Charter of crowdfunder rights.
The aim of the ECN Charter of crowdfunder rights is to state the general principles that any European citizen using a crowdfunding platform, whether as an investor or as a donor, should be able to rely on.
2.1 Categories of crowdfunders targeted by the Charter
Virtually all types of crowdfunding platforms should comply with the principles below, including:
- peer-to‐peer lending,
- individual-to‐business lending,
- bond‐based crowdfunding,
- equity‐based crowdfunding,
- reward‐based crowdfunding,
- donation‐based crowdfunding
- Initial Coin Offerings and Token Events
2.2 Categories of crowdfunders targeted by the Charter
The ECN Charter of crowdfunder rights is specifically designed for the protection of European “non-professional investors” as defined in the Markets in Financial Instruments Directive (“MiFID”). However, transparency guidelines should apply for all types of crowdfunders, including “professional investors” as defined in the MiFID. Investors as well as donors should benefit from the Charter.
3. Legal effect
The ECN Charter of crowdfunder rights merely sets out principles and do not constitute Court-enforceable regulations.
National regulations are not meant to be overruled by the ECN Charter of crowdfunder rights.
4. General principles
Crowdfunders and possible crowdfunders must receive all relevant information on a crowdfunding platform in order to be reasonably able to understand the nature and risks of the placement proposed. Such information shall be provided in a comprehensible form.
4.1 Transparency on projects and project owners
Crowdfunders should be able to have at all times access to all relevant information concerning projects and project owners presented on a crowdfunding platform; such information will include the identification of the project owner (name, address, trade registry number of applicable), the due diligence performed by the platform on any project as well as possible conflicts of interest with the platform or its shareholders and all specific risks identified in the project.
4.2 Transparency on crowdfunding platforms
Crowdfunders should be able to access relevant information pertaining to the regulatory status of the platforms and its terms and conditions of use (including fees and charges, duties and responsibilities, personal data policy, money safekeeping processes etc.).