Crowdfunding in the EU gets a boost from EU Executive

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Jayne Reid
28th March 2014

Crowdfunding has been given a helping hand in the UK recently with the market set to be regulated from 1 April.

It’s true that many other European nations have looked to the UK to see how regulation unfolds, particularly the restrictions placed on individual investors, so those looking to set up in the European markets will be encouraged by a new report by the EU Executive.

The EU Executive has recently acknowledged the power of crowdfunding for small businesses and the desire to fund them from individuals. In a document seen by Reuters and set to be published shortly, an EU-state quality label could be applied, as could state aid to boost the industry.

“Crowdfunding is an important source of finance to some half a million European projects each year that otherwise may not obtain the necessary funds to be realised,” the document said.

“In view of this important public interest role, member states may support crowdfunding with their own resources, provided that there is an established market failure affecting the profitability of crowdfunding platforms,” the document continued.

The plans would involve the creation of a pan-EU forum to improve standards and best practices to protect contributors from fraud and make sure complaints are handled properly.

Several EU states have already begun introducing rules for crowdfunding, but the Commission document signals that Brussels is cautious about stepping in too soon with pan-EU regulation.

“The Commission will continue to monitor the market and assess the need for regulatory action as a response to changing circumstances,” the document said.

So if you’re interested in running your own crowdfunding or peer-to-peer lending platform in Europe, you can consider it a step closer to reality.

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