The EU’s new cross-border crowdfunding rules which are expected to come into force later this year have been touted as a huge benefit for investors.
Crowdfunding and peer-to-peer lending regulations currently differ from bloc to bloc, but the new legislation will introduce harmonized rules in each member state.
Oliver Gajda, executive director of trade body EuroCrowd, said the rules will allow lenders and borrowers to access platforms in different EU countries and ensure that all platforms are regulated and supervised to the same standards.
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Gajda said the rules will improve standards and investor safety, while reducing fraud, and that investors will receive more information from the platforms.
He said the regulations would likely go into effect in member states without an existing regulatory framework on November 10, 2021, while countries with existing rules have an extra year to comply.
“This is quite beneficial for investors as you are dealing with counterparties which are all subject to similar rules,” Gajda said.
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“For me, the rules are about ensuring consumer protection, ensuring as little fraud as possible, creating a climate of trust and adopting comparable business practices across the Union, and as an investor , you will benefit from a fairly similar, if not equal, set of information during the investment process.