The Regulation introduces a single European status for any legal persons seeking to provide crowdfunding services, the "European crowdfunding service providers" (“ECSP”), to be authorized by the national authority of its home Member State. An authorized ECSP may passport its services to project owners or investors located in other EU members states, without necessity to establish a physical presence thereto. In other words, investors from a certain European Member State will now have the opportunity to participate in cross-border financing projects of companies based in another Member State, through a crowdfunding platform based in a third Member State.
Investors, now classified as “sophisticated” or “non-sophisticated”, will gain access to an enlarged offer of crowdfunding services, ranging from lending-based or investment-based crowdfunding to individual portfolio management of loans.
New opportunities brought to the crowdfunding platforms by the Regulation do not come without a cost, as they will have to establish strong governance to comply with the new requirements set by the Regulation (publication of a Key Investment Information Sheet (“KIIS”) to be provided to the potential investors, due diligence requirements, conflict of interest policy, etc.).
