On November 10, 2023, the European regulation comes into force: the benefits for investors and businesses

The crowdfunding industry has evolved a lot, and one of the most important innovations in recent years is the new European regulation for crowdfunding services, which as of November 10, 2023, replaces the Italian regulation, allowing it to operate under a unified regulatory framework throughout Europe.

What is the new European regulation

It was designed with the aim of harmonizing and regulating crowdfunding at the European level, providing common rules for all platforms. The regulation, called European Crowdfunding Service Providers (ECSP), applies to both equity and lending crowdfunding and replaces the relevant Italian law.

What are the main changes

One of the changes introduced by the new ECSP regulation is the creation of a European license for crowdfunding platforms, allowing them to operate across borders. This means that platforms that obtain approval from their national supervisory authority (in the case of Italy Consob), can offer services in all other European countries through a simple notification to the authority of the additional Member State in which they intend to operate but without the need for new authorizations.

In addition, the ECSP Regulation increases the protection of investors and savers through the implementation of stricter transparency rules.

What are the benefits of the new ECSP Regulation?

The ECSP Regulation offers numerous benefits for both the crowdfunding market and for investors and companies seeking capital.

• For the market: ECSP encourages the development of a single, transactional crowdfunding market by breaking down regulatory barriers between member states. This encourages greater growth and development for crowdfunding platforms within the EU single market.
• For investors: the regulation leads to greater protection of their investments and savings. Indeed, crowdfunding platforms are required to provide even clearer and more understandable information about projects, enabling investors to make more informed decisions. The new rules ensure greater transparency and regulation, creating a centralized European supervisory system. A number of mechanisms are also activated to protect the investor, particularly those with little experience in equity crowdfunding and who want to invest in highly innovative companies.
• For companies: the ECSP Regulation gives all corpor ations the opportunity to make crowdfunding raises to a maximum limit of €5 million. It also allows companies to access funding from investors in other EU countries.

Timelines

The new regulation takes effect on November 10, 2023, giving crowdfunding platforms time to adapt to the new rules and obtain the accreditation needed to operate at the European level. During the transition period, existing platforms can continue to operate under the old national rules and begin implementing the changes required by the new regulation.

Mamacrowd's position

As one of the leading equity crowdfunding platforms in Italy, Mamacrowd is preparing for the entry into force of the new European regulation. In fact, we are working to obtain authorization as a crowdfunding service provider under the European Regulation and to adapt to the new rules. Mamacrowd believes that the new regulation represents an important opportunity for the crowdfunding industry, allowing platforms to operate in a wider market.

Mamacrowd is ready to use the new regulation as an opportunity to grow and offer increasingly secure and transparent crowdfunding services to businesses and investors.