Crowd and peer to peer finance

Key points:

The EESC:

• strongly welcomes these proposals to create an enabling framework for crowdfunding by means of a 29th regime. The Committee therefore calls for swift action in order to achieve a successful outcome, particularly as it fits into a broader framework that is of particular interest to the Committee;

• welcomes the fact that the financing of small, young and innovative enterprises has been taken into consideration. Crowdfunding is an important part of their funding escalator, particularly when they move from a start-up to an expansion phase and traditional financing is not always available. At the same time, more and better opportunities are being created for investors;

• welcomes the fact that use is being made of innovative products and solutions supported by modern technology, meaning that this forward-looking proposal also forms part of the implementation of a digital single market. The proposal also adds a cross-border dimension, which contributes to the effective integration and deepening of capital markets. The creation of a single harmonised market in the EU with the same rules for both entrepreneurs and investors should be a primary consideration;

• welcomes the consideration given to the risk aspects associated with crowdfunding operations and markets, but at the same time believes that - at least in the initial stages - there should be an even stronger focus on these aspects in order to better identify them or mitigate them where possible;

• is of the view that the risk assessment of specific projects on crowdfunding platforms is left too much to markets and investors. The EESC believes that appropriate measures are needed to better identify or mitigate all risks, both financial and non-financial. Ultimately, it is about better protection for investors;

• believes that the role of ESMA seems clear, that of national supervisors less so. The Committee is of the view that more clarity is needed here. Furthermore, the EESC wonders whether a substantial role should perhaps be assigned to national supervisors, especially as they are closer to national markets and can better assess local circumstances.