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EBA consultation on draft RTS on Individual Portfolio Management of loans offered by crowdfunding service providers

by Oliver Gajda on 21.06.2021

The European Banking Authority (EBA) is asking industry feedback on draft Regulatory Technical Standards (RTS) specifying the information that crowdfunding service providers offering individual portfolio management of loans shall provide to investors - in particular in relation to the method to assess credit risk, and on each individual portfolio. The draft RTS also specify the policies, procedures and organisational arrangements that crowdfunding service providers shall have in place in relation to any contingency fund they may offer to investors. The consultation runs until 4 September 2021.

To reduce information asymmetry between crowdfunding service providers and investors, as well as to ensure transparency and adequate protection for investors, the draft RTS require crowdfunding service providers to show that the measurement techniques used for credit risk assessments are based on a sufficient number of elements and are appropriate to the complexity and level of the risks underlying i) the single projects; ii) the portfolio; iii) the project owners. In addition, the draft RTS set out the information that crowdfunding platforms must disclose referring to several key characteristics of each loan included in a certain portfolio. In addition, the draft RTS specify adequate policies, procedures and governance arrangements that providers should have in place when managing, either directly or through a third party provider, contingency funds. The consultation is open for comments until 4 September 2021.

A public hearing will be organised in the form of a webinar on 20 July 2021 from 11:00 to 12:30 CET. The EBA invites interested stakeholders to register using this link.

The consultation paper can be downloaded from the EBA website, were also further details can be found. EUROCROWD is viewing the proposed positive and finds it in line with the overall goals of ECSPR and will submit its opinion in due course after consulting with its European membership base. Interested parties seeking to exchange view on this topic are encouraged to contact us at EBA_CP_2021_22@eurocrowd.org