Non-Harmonised Participatory Finance Platforms (PFPs)

Non-harmonised crowdfunding platforms

Non-harmonised crowdfunding platforms are those that do not comply with the requirements set by Regulation (EU) 2020/1503 on European providers of crowdfunding services for companies. These platforms can offer crowdfunding services for companies, but are not subject to the requirements set by the regulation.

Can they operate within the European Union?

Yes, non-harmonised crowdfunding platforms can operate within the European Union. However, they are subject to national regulation in the Member State in which they operate. National regulation may vary from one Member State to another.

Where are they regulated?

Non-harmonised crowdfunding platforms are regulated by the national legislation of the Member State in which they operate. In Spain, the national legislation regulating non-harmonised crowdfunding platforms is Law 5/2015 of 27 April 2015 on the promotion of business financing.

Why do they refer to the exception in Article 1(2)(a) and Article 1(2)(c) and Article 55 of the LFFE?

Article 1(2)(a) and Article 1(2)(c) of Regulation (EU) 2020/1503 provide for two exceptions to the scope of the regulation. The first exception applies to crowdfunding platforms that only offer equity crowdfunding services to experienced investors. The second exception applies to equity crowdfunding platforms that only offer debt crowdfunding services to companies with a turnover of less than EUR 50 million.

Article 55 of Law 5/2015 of 27 April 2015 on the promotion of business financing establishes a special regime for crowdfunding platforms that comply with the exemptions in Article 1(2)(a) and 1(2)(c) of Regulation (EU) 2020/1503. This special regime allows these platforms to operate without having to obtain authorisation from the National Securities Market Commission (CNMV).

What operational and regulatory specialities differentiate harmonised and non-harmonised crowdfunding platforms?

Harmonised and non-harmonised crowdfunding platforms differ in the following operational and regulatory specialities:

• Authorisation: Harmonised crowdfunding platforms must obtain authorisation from the CNMV. Non-harmonised crowdfunding platforms are not required to obtain authorisation.
• Minimum share capital: Harmonised crowdfunding platforms must have a minimum share capital of €100,000. Non-harmonised crowdfunding platforms do not have a minimum share capital.
• Conduct rules: Harmonised crowdfunding platforms are subject to the conduct of business rules set out in Regulation (EU) 2020/1503. Non-harmonised crowdfunding platforms are subject to the conduct of business rules set out in the national law of the Member State in which they operate.
• Disclosures to investors: Harmonised crowdfunding platforms must provide investors with the disclosures set out in Regulation (EU) 2020/1503. Non-harmonised crowdfunding platforms are subject to the disclosure rules set out in the national law of the Member State in which they operate.
• Investor classification: Harmonised crowdfunding platforms must classify investors as experienced or inexperienced. Non-harmonised crowdfunding platforms are not required to classify investors.
• Investment limits: Harmonised crowdfunding platforms are subject to the investment limits set out in Regulation (EU) 2020/1503. Non-harmonised crowdfunding platforms are not subject to the investment limits set out in the regulation.
• Disclosure of default rate: Harmonised crowdfunding platforms are obliged to disclose the default rate of loans granted in the last 12 months. Non-harmonised crowdfunding platforms are not obliged to publish the default rate.

In general, harmonised crowdfunding platforms are subject to stricter regulation than non-harmonised crowdfunding platforms. This regulation aims to protect investors and project promoters.

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Required Standards of Conduct for Harmonised PFPs

Harmonised crowdfunding platforms must comply with the following rules of conduct

What are the legal and regulatory requirements for non-harmonised crowdfunding platforms?

Non-harmonised crowdfunding platforms, also known as domestic crowdfunding platforms, are those that do not comply with the requirements set by Regulation (EU) 2020/1503 on European providers of crowdfunding services for companies. These platforms can offer crowdfunding services for companies, but are not subject to the requirements set by the regulation.

The legal and regulatory requirements for non-harmonised crowdfunding platforms are those established by the national legislation of the Member State in which they operate. In Spain, the national legislation regulating non-harmonised crowdfunding platforms is Law 5/2015 of 27 April 2015 on the promotion of business financing.

These requirements include the following:

• Identification and registered office: Non-harmonised crowdfunding platforms must identify themselves and provide their registered office to the Comisión Nacional del Mercado de Valores (CNMV).
• Activity: Non-harmonised crowdfunding platforms must inform the CNMV of the crowdfunding activity they intend to carry out.
• Promoter requirements: Non-harmonised crowdfunding platforms must verify that project promoters comply with the requirements set out in national legislation.
• Information to investors: Non-harmonised crowdfunding platforms must provide investors with the information set out in national legislation.
• Investor protection: Non-harmonised crowdfunding platforms must take the necessary measures to protect investors, in accordance with national law.

In general, the legal and regulatory requirements for non-harmonised crowdfunding platforms are less stringent than the requirements for harmonised crowdfunding platforms. This is because non-harmonised crowdfunding platforms are not subject to Regulation (EU) 2020/1503, which establishes a stricter protection regime for investors and project promoters.

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