France: AMF Comments on Investment Crowdfunding – “An Investment of Conviction”

The French Autorité des Marchés Financiers (AMF) has posted a comment on its website commenting on investment crowdfunding. The AMF notes to change to online capital formation under EU harmonized rules or European Crowdfunding Service Providers Regulation (ECSPR).

The AMF explains:

Crowdfunding: a regime undergoing transition

Crowdfunding, initially regulated at national level, has been the subject since November 10, 2021, of a harmonized European regime for the financing of projects of a commercial nature in the form of loans against payment or securities. Crowdfunding platforms subject to the national regime have until November 10, 2023, to take the necessary steps to be able to continue their activities beyond this date.

The AMF adds that “participatory financing” or crowdfunding is an alternative mode of financing to traditional players – like banks – for entrepreneurs and innovative firms who wish to finance a commercial activity. This includes early-stage firms, real estate investments, and more. The AMF has also posted a comment on real estate or property crowdfunding – a sector of online capital formation that has garnered a good amount of traction in France.

In the past, France has also included e-commerce or rewards platforms, as well as, donations falling under the crowdfunding definition, but today most insiders no longer view e-commerce/donations as crowdfunding.

The AMF adds a note of caution as these tend to be riskier investments and describes investing, at least under early-stage ventures, as “an investment of conviction.”

The AMF notes that national platforms previously regulated under bespoke French rules as crowdfunding investment advisers (CIP) and crowdfunding intermediaries (IFP) registered before November 10, 2021, as well as investment services providers (ISPs) can continue to provide the services covered by the new European regime until 10 November 2023 or until they are approved under ECSPR.

France is one of the most active jurisdictions for securities crowdfunding in the EU, if not the top country providing online investments in private securities offerings.

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