EU: There Are Now 190 ECSPR Approved Crowdfunding Platforms
As CI has covered in the past couple of years, the European Union created harmonized rules designed to improve online capital formation under ECSPR, or European Crowdfunding Service Provider Regulation. Advocates, like EuroCrowd, have lobbied the EU for years to advance the common-sense approach of creating a level playing field for these securities platforms. Today, platforms approved under ECSPR may raise up to €5 million from anyone over the age of 18 in each EU member state. The one caveat is that a platform must be approved by the relevant authority in a member state to enable the sale of securities across the EU, and there are nuances to the rules within each member state.
For example, each member state has a different threshold as to when a prospectus. In many countries, the threshold is €8 million but there are some with a lower threshold — down to €1 million.
The EU pursued ECSPR in recognition of the underdeveloped securities crowdfunding industry, which was impeded by high compliance costs and a lack of harmonization.
ESMA continues to query and propose resolutions to questions that have arisen. Industry insiders are already looking for ways to improve the ecosystem.
The text of the ECSPR regulation is available here.
The last time CI looked at the number of ECSPR-approved platforms, in October 2023, there were over 60 providers. Today, that number has rocketed higher, with 190 platforms approved, according to the European Securities and Markets Authority (ESMA). While most platforms were approved in 2023, a good number were approved this year (32).
The breakdown of number of platforms by country is as follows:
- Austria — 3
- Belgium — 7
- Bulgaria — 3
- Cyprus — 2
- Czech Republic — 4
- Denmark — 2
- Estonia — 1
- Finland — 1
- France — 55
- Germany — 4
- Ireland — 5
- Italy — 27
- Latvia — 3
- Lithuania — 13
- Netherlands — 18
- Poland — 3
- Romania — 3
- Slovakia — 6
- Spain — 22
- Sweden — 8
France is home to the most approved platforms by far with 55 registered with ESMA. This is largely due to a regulatory environment that enables online capital formation, along with the fact it is one of the largest EU economies. Germany, on the other hand, has struggled with an obstructive regulatory environment that has slowed development. With the help of the German crowdfunding association, the regulatory environment is being improved.
Under the ECSPR regime, it has been estimated that over €1 billion was raised in 2023, with the majority originating from loan or debt-based offerings. Some platforms specialize in niche sectors like green offerings or real estate. Two US-based operations are active, including Wefunder, licensed in Ireland and Republic via its acquisition of Seedrs.
Read the full article: https://www.crowdfundinsider.com/2024/04/224308-eu-there-are-now-190-ecspr-approved-crowdfunding-platforms/
