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Peru advances in the regulation of the crowdfunding sector

The regulation of the crowdfunding market in Peru is advancing. A resolution was issued in April to allow companies already active in the crowdfunding sector continue their operations. There were five companies that took advantage of the SMV standard since they had been carrying out crowdfunding activities. By the end of the year the new regulation should be ready.

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Before the end of the year, the regulation for crowdfunding, known for its mechanism of collective participation for financing, should be ready in Peru, said Carlos Rivero, assistant superintendent of Research and Development of the Superintendence of the Stock Market (SMV).

As recalled at the beginning of the year, Emergency Decree 013-2020 was issued for the financing of MSMEs, startups, and entrepreneurship, which establishes that the SMV will issue the complementary rules for its application.

In this regard, Carlos Rivero explained that in order to ensure the operability in the market with companies that were already carrying out this type of operation, through the participatory financing platforms, a resolution was issued (Resolution 005-2020-SMV) on April 22nd.

“The idea was to assure in the market the platforms that already had operations, in this case, they made loans, not equity or other operations, so a safe-conduct was given to the companies,” expressed at the Latin Forum Fintech, organized by Emprende UP.

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Five companies already took advantage of the SMV standard

Based on this, five companies were the ones that took advantage of the SMV standard since they had been carrying out these activities, in order not to affect operations.

As a complement, the MVS asked the companies if they had business continuity plans, internal regulations, default indicators, among others, in order to know how far they were from the D.O.D. or would be when the complementary standard was issued for the adaptation period.

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“In addition, they were asked to reveal the risks they carried, in order to know how flexible the norm could be,” he detailed.

On the other hand, in this regulatory process, Carlos Rivero mentioned that many questions were raised as to whether the norm applied to crowd factoring, the discount platforms for bills of exchange, being the biggest doubt in this process, but it was specified that such operations were not contemplated in the Emergency Decree, since they already had a regulation in force.

What is coming next for the crowdfunding sector in Peru

Carlos Rivero detailed that in one month the first project should be issued for public consultation in the market:”This is a project that has been supported by the World Bank to understand comparative legislation,” he said.

In that way, details such as the minimum capital limitation that this type of platform must have, investment limits, operation amounts, must be reported to the SMV.

Also, whether or not the crowdfunding platform will be able to carry out complementary activities and how the risks will be dealt with in different scenarios.

The representative of the SMV indicated that complementary information has been received in recent days that will contribute to the analysis for the development of the crowdfunding platform.

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(Featured image by dragondeluz via Pixabay)

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

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J. Frank Sigerson is a business and financial journalist primarily covering crypto, cannabis, crowdfunding, technology, and marketing. He also writes about the movers and shakers in the stock market, especially in biotech, healthcare, mining, and blockchain. In the past, he has shared his thoughts on IT and design, social media, pop culture, food and wine, TV, film, and music. His works have been published in Investing.com, Equities.com, Seeking Alpha, Mogul, Small Cap Network, CNN, Technology.org, among others.