Crowdfunding is a new way of financing projects by raising funds from the public.
It consists of raising funds – usually in small amounts – from large numbers of people to finance a creative endeavour (e.g. music, a book, a film, etc.) or a business venture. Crowdfunding campaigns may support local initiatives or projects promoting certain values.
Crowdfunding is usually carried out via the internet and takes various forms:
- donations with or without some benefit in return
- loans with or without interest
- subscriptions of securities
In France, to foster the development of crowdfunding in a secure environment for contributors (donors, lenders or investors), the public authorities adjusted regulations by issuing Ordinance 2014-559 of 30 May 2014.
The new arrangements come into effect on 1 October 2014.
A certification has also been created to identify platforms that comply with the new rules introduced by Ordinance 2014-559 of 30 May 2014 and Implementing Decree 2014-1053 of 16 September 2014.
Depending on the nature of the proposed funding, crowdfunding platforms may or may not need to have regulated status to carry on their business:
- A platform for crowdfunding via the subscription of financial securities issued by an unlisted company must be registered in the ORIAS register as a crowdfunding advisor (CIP). Such a platform may also opt for the status of investment services provider (ISP) providing consulting services, in which case it must be licensed by the ACPR. Such platforms are regulated by the AMF alone in the case of CIPs and by the AMF and the ACPR jointly for ISPs.
- If the website proposes to fund projects in the form of a loan with or without interest, the platform must be registered in the ORIAS register as a crowdfunding intermediary.
- The ACPR may inspect a crowdfunding intermediary at any time.
- If the website only offers funding in the form of donations, the platform is not required to register with ORIAS. However, it may opt to register as a crowdfunding intermediary. In this case, it must comply with all the rules applicable to crowdfunding intermediaries.
Caution: if the website collects funds on behalf of third parties as part of crowdfunding campaigns, the platform must, at minimum, be licensed as a payment institution by the ACPR or registered as an agent of a payment services provider.
For more information:
Legislation in force:
- Ordinance 2014-559 of 30 May 2014 on crowdfunding
- Decree 2014-1053 of 16 September 2014 on crowdfunding
- Order of 22 September 2014 certifying amendments to the general regulation on crowdfunding
- Order of 30 September 2014 on the professional competence of crowdfunding intermediaries
- Order of 24 September 2014 certifying the articles of incorporation of the body tasked with maintaining the single register of insurance, banking and finance intermediaries
- Order of 24 September 2014 amending the Order of 20 December 2012 laying down the amount of annual fees for registration in the single register of intermediaries referred to in Article L.546-1 of the Monetary and Financial Code
Updated on: 06/07/2018 15:11