58 Crowdinvesting Platforms Authorized Under the New Regulation in Europe

European countries are proceeding apace with the authorization for crowdinvesting platforms to operate under the new European crowdfunding regulation.

Those where at least one authorization has been granted, in fact, have become 12 from 5 in our previous survey as of February 2023.

There are 58 authorized crowdinvesting platforms (in February there were 18), with the majority in France (15) and the Netherlands (12), followed by Spain’s 8 and Lithuania’s 6. Prominent among the new countries to have authorized at least one platform is Germany.

As a reminder, under the new rules, a crowdfunding provider must be approved by the relevant authority by November 10 in order to operate, even if only in its own country.

Read more about the crowdinvesting platforms authorized under the new European regulation and find other interesting business news with the Born2Invest mobile app.

The types of authorized crowdinvesting platforms

Of the authorized platforms, 24 operate only in equity crowdfunding, 14 only in lending crowdfunding, and as many as 20 have obtained authorization for both types.

Of the 24 in equity only, France has authorized half (12), 4 the Netherlands, 3 Sweden, 2 Spain and one each, Belgium, Austria and Latvia.

Of the 20 authorized for both types, Spain got 6, followed by the Netherlands with 4 and France with 3. While Belgium and Slovakia authorized 2 and one each Germany, Estonia and Lithuania.

Finally, for Lending alone, Lithuania authorized 5, the Netherlands 4, and Sweden 2. Belgium, Estonia, and Romania have authorized one.

Among the large countries, only Italy is missing

As can be seen, only Italy is missing from the list, despite the large number of crowdinvesting platforms operating in our country, some for several years now.

Specifically, there are 17 equity crowdfunding platforms that have launched and closed at least one campaign this year, and thus already authorized at the time by Consob.

Lending crowdfunding portals operating this year are about 25, including those specializing in real estate, those dedicated to SME loans, and those offering both asset classes.

The causes of the lag

Italy’s serious delay depends first and foremost on the very long timeframe in which the governments in office between 2020 and 2022 transposed the European directive and, more importantly, formally appointed the competent authority to grant authorizations. This did not happen until April 2023 with the appointment of Consob and the Bank of Italy (DL No. 30 of March 10, 2023, which came into effect on April 8).

And Consob, although in record time, only managed to issue the implementing decree for the regulation on June 1st.

In fact, Italian platforms were only able to go ahead and submit their first applications for authorization in the second half of June, just over two months ago.

Last July 20, at the presentation of the eighth Italian Report on Crowdinvesting produced by the Observatory of the same name of the School of Management of the Politecnico di Milano, Dr. Emma Iannaccone of Consob had reported that as of that date, there were 25 applications filed.

So, just over half of those launched at least one campaign during 2023. Not a very few.

In addition to the necessary technical timeframes, moreover provided for in the regulation itself, it would seem, however, that many platforms complain of excessive punctiliousness in the Authority’s additional requests, especially related to organization, projected budgets, and business model, which are the responsibility of the Bank of Italy and which would, moreover, be disproportionate to the size of the companies operating the portals.

Such requests, which in other countries are not made by the respective local authorities, would further delay the authorization process.

The possible consequences

Should applications not be granted and approved by Nov. 10, Italian platforms would not be able to operate, thus wiping out crowdinvesting, i.e., the complementary finance market, entirely.

Even just the uncertainty of when a platform will be able to obtain approval will create a great deal of unease. For example, it seems that a campaign launched say in October will not be able to be continued beyond the November 10 deadline because it was authorized under the previous rules. So in October, it is likely that the market will come to a halt.

Finally, in addition to the time delay, if it were found that the Italian authority’s compliance requirements were much greater and more restrictive than those of other European authorities, it would generate a clear imbalance between Italy and other European markets.

In addition to being blatantly contrary to the spirit in which the European Regulation was created (making Europe a single market with equal opportunities for companies and investors), this would greatly penalize not only Italian crowdinvesting platforms, but also startups and SMEs and, last but not least, investors.

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(Featured image by 12019 via Pixabay)

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First published in Crowdfunding buzz. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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