- 1) Single Market: crowdfunding platforms are highly dependent on network effects. Scale not only increases the viability of business models, but also provides greater benefits for platform users – investors and project owners. Currently crowdfunding platforms face substantial difficulties when attempting to expand into other EU Member States and are thus mostly confined within their national borders. This initiative will provide platforms that wish to operate at an EU-level the possibility to apply for a European Crowdfunding Service Provider (ECSP) license through the European Securities Markets Authority that will allow them to seamlessly provide services across the Single Market.
- 2) Sectoral Integrity and Safety: crowdfunding has yet to establish itself as a reliable and mature sector and investors are particularly cautious about making investments on a cross- border basis. This is in part due to diverging sets of rules adopted by different Member States that create uncertainty as regards the applicability of safeguards, due diligence treatment as well as the level of scrutiny. This initiative will provide a recognisable European label that will ensure a transparent and safe environment for fund intermediation, allowing investors to focus on the viability of projects they wish to support.

1.5.2. Added value of Union involvement (it may result from different factors, e.g. coordination gains, legal certainty, greater effectiveness or complementarities). For the purposes of this point 'added value of Union involvement' is the value resulting from Union intervention which is additional to the value that would have been otherwise created by Member States alone.

EU action would reduce significantly the complexity, financial and administrative burdens for all key stakeholders, i.e. crowdfunding platforms, project owners and investors at the same time ensuring a level playing field among all the service providers using the same EU label. Furthermore, harmonising prudential rules, operational conditions and rules on transparency for all the relevant players would bring clear benefits to investor protection and financial stability. By harmonizing the essential features that constitute a crowdfunding platform, the proposal aims at establishing a uniform framework in relation to the definition of such crowdfunding activity, clearly setting common rules in specific areas. Newly emerging evidence in stakeholders' consultations and external studies call for action at this point in time. The purpose of the action at EU level is to contribute to the effective and efficient development of the crowdfunding services in the EU, protection of investors, stability and effectiveness of the financial system, for the Union economy, its citizens and businesses. The impact assessment accompanying the Commission's proposal contributes to greater understanding of why these objectives are better achieved at Union level.

####### 1.5.3. Lessons learned from similar experiences in the past

New initiative

####### 1.5.4. Compatibility and possible synergy with other appropriate instruments

The objectives of this proposal are consistent with a number of other key EU policies and ongoing initiatives, notably the Capital Markets Union, the FinTech initiative and the Digital Single Market.