Identifying market and regulatory obstacles to crossborder development of crowdfunding in the EU

This report identified potential barriers to cross-border transactions that prevent securities-based and lending-based crowdfunding from scaling up across Europe.

The report looked at the divergent regulatory approaches to crowdfunding across EU Member States, considers microstructural features of crowdfunding that may give rise to transaction costs that are beyond the immediate reach of regulators, and analyses the implications of these features from the perspective of consumer and investor protection and the importance of appropriate disclosures and safeguards.

The purpose of the study was to support the European Commission in monitoring the development of the crowdfunding sector and the effectiveness and degree of convergence of national regulatory frameworks, as well as to promote convergence, sharing of best practice and keep developments under review, by assessing the development of cross-border business and the investor protection aspects.

Findings:

The report finds that the European crowdfunding sector is characterised by its highly heterogeneous nature, shaped by the different starting points of nascent national crowdfunding sectors across the EU, and largely determined by the incumbent regulatory frameworks as they pertain to crowdfunding as a novel form of technologically mediated market exchange.

Impact:

The report was used by the EU in their exercise to develop a pan-European regulatory framework.