The European Crowdfunding Service Providers Regulation (EU) 2020/1503 and its effects on harmonising the EU financial crowdfunding regulatory framework

Abstract

For a long time, even up until a couple of years back, the Commission believed that, given the largely local character of crowdfunding, there was no compelling justification for an EU-wide legislative intervention. However, the necessity to regulate the supply of crowdfunding services at the EU level arose over time as a result of the steadily developing and growing crowdfunding sector, which had resulted in disparate national regimes throughout the EU and consequent legal fragmentation. Therefore, this led to the implementation of the European Crowdfunding Service Providers Regulation. Given that the Member States are still within the transitionary period prescribed by the Regulation and given that it is indeed a regulation and so it has direct effect, most Member States have yet to adapt their existing regulations to reflect, and more importantly not counteract the provisions in the Regulation. Other than that, since the activities involved in crowdfunding are sometimes tackled by other regulations, this may allow for some legal ambiguity with regards to under which regulations certain services are regulated. Therefore, this dissertation aims at addressing these two issues by assessing how the Regulation interplays with existing and new regulatory efforts by the Member States. With a focus on the extent to which European Union (EU) Crowdfunding Service Providers Regulation is effective in harmonising the financial crowdfunding regulatory framework in the EU, a comparative approach will contribute to understanding past EU regulation, leading up to the regulation in question. The dissertation will also take a look at the practical aspect of crowdfunding in the different Member States, both before and following such Regulation. Finally, this dissertation will scrutinise this Regulation through glimpsing at the possible risks that certain provisions may pose in the context of a pan-European regime.