The European Securities and Markets Authority (ESMA) has published its final report on the “Draft Technical Standards under the European Crowdfunding Service Providers for Business Regulation.”
As was previously reported, European Crowdfunding Service Providers Regulation (ECSPR) goes into effect today. This enables issuers to raise capital online across the European Union under harmonized regulations. Platforms are licensed at the member state level.
The draft technical standards are submitted to the European Commission (EC) for consideration and possible adoption. The EC shall then decide whether to adopt the technical standards within 3 months.
In 2020, the EU announced pan-European securities crowdfunding rules, tasking ESMA to develop draft regulatory technical standards. This applies to both debt and equity offerings.
The 12 standards covered in the document, include:
- Complaints handling;
- Conflict of interest;
- Business continuity plan;
- Authorisation;
- Information on default rate;
- Entry knowledge test and simulation of the ability to bear loss;
- Key investment information sheet;
- Cooperation between competent authorities;
- Reporting;
- Notification to ESMA of national provisions concerning marketing requirements;
- Cooperation between competent authorities; and
- Cooperation between competent authorities and ESMA
ESMA says it will continue to issue Q&As to further clarify the regulatory ecosystem and the application of ECSPR.