Eurocrowd welcomes the latest update from ESMA and looks forward to further clarifications on ECSPR to enable fast and professional implementation in the market. ESMA has updated its Questions and Answers (Q&A) on the application the European crowdfunding service providers for business Regulation.

• Regarding the European Regulation on crowdfunding service providers for corporates, it has updated the section on the proof of equity and SPV.

ESMA has developed a Q&A document on the European Crowdfunding Service Providers Regulation to provide guidance and clarifications on its application. This regulation is aimed at regulating crowdfunding platforms within the European Union. The Q&A document serves as a valuable resource for crowdfunding service providers and market participants by offering practical insights and explanations on various aspects of the regulation. The Q&A is available here.

Of specific interest to the market are the updates to the use Special Purpose Vehicles (SPV) and the authorisation and supervision of Crowdfunding Service Providers (CSPs). On the authorisation of SPV the Q&A now clarifies with more granulaty how applicants will have to provide the relevant authorising authority with the documentation of how the applicant calculated the amount of the prudential safeguards in accordance with Article 11 of the ECSPR in relation.

On SPV the Q&A now clarifies the rules under which a CSP might take a participation in an SPV that is used to acquire underlying assets as long as it can prove to its National Competent Authority that the participation "does not equal participation in the underlying crowdfunding offer" nor impair the neutrality of the SPV towards its clients.

. While the ability to use and potentially set up SPV is a welcome adjustment in the interpretation, the referral of the decisions of the "nature of the participation of the CSP in an SPV and its potential impact on the neutrality of the CSP" to the National Conduct Authorities raises concern about fragmentation in the application on the market, as the guidelines leave relevant room for interpretation of the nature of participation.

However, the key benefit of the clarification of ESMA is that a national competent authority now may consider that participation taken or held by a CSP "does not equal participation in the underlying crowdfunding offer and that the neutrality of the CSP is not impaired when it receives evidence that the taking or holding of a participation in an SPV does not create, for the CSP, a distinct economic incentive" - other than the one linked to the receipt of service fees charged by the CSP that is. CSPs will now be able utilise SPVs in a broader manner in the acquisition of illiquid and non-transferable assets and remove potential conflicts of interest for the CSP. It would be beneficial to the development of the market if National Conduct Authorities could find a way to discuss regulatory convergence regarding the details of the applicable thresholds when they consider client neutrality as being breached.