# EUR-Lex - 52014DC0172 - EN

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# 52014DC0172

**COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Unleashing the potential of Crowdfunding in the European Union /* COM/2014/0172 final */**

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Communication
from the Commission to the European Parliament, the Council, the European
Economic and Social Committee and the Committee of the Regions

"Unleashing
the potential of Crowdfunding in the European Union"

1.
Introduction

Crowdfunding generally refers to an open call
to the public to raise funds for a specific project. In 2012 about €735 million[1] was
raised for all forms of crowdfunding in Europe and the predicted figure for
2013 is around €1 billion. This figure is rather marginal compared to retail
bank lending to non-financial institutions (€6 trillion in 2011), but it is promising
compared to the financing provided by business angels (visible market segment
estimated at €660 million in 2010) or venture capitalists in seed, start-up,
later and growth stages (€7 billion in 2012).[2]
Crowdfunding is an important source of finance to some half a million European projects[3] each
year that otherwise may not obtain the necessary funds to be realised.

There is great potential in crowdfunding to
complement traditional sources of finance and contribute to the financing of
the real economy. The Green Paper on Long Term Financing of the European
Economy[4]
initiated a broad debate on the different factors that enable the European
economy to channel funding towards the long term investments needed to ensure
economic growth. The follow-up Communication outlines a number of priority
areas where the Commission intends to take initiatives to help SMEs attract
funding.

Crowdfunding is part of this work plan. It is
one of the newly emerging financing models that increasingly contribute to helping
start-ups move up the "funding escalator"[5] and
contribute to building a pluralistic and resilient social market economy.
Crowdfunding has real potential to finance different types of projects, such as
innovative, creative and cultural projects, or activities of social
entrepreneurs, that have difficulties in accessing other forms of financing.

While crowdfunding is a
promising new form of fundraising, responses to the Commission's public
consultation on crowdfunding[6]
as well as the Startup Europe Crowdfunding Network survey[7] highlighted
a number of issues which will be decisive if its potential benefits are to be
released. These range from lack of awareness and understanding, challenges of
protecting intellectual property, through fraud and consumer protection concerns,
to issues of legal uncertainty and burdensome regulatory requirements. Many of
these issues relate to other forms of finance as well. In the following, this
Communication focuses on those issues that are particularly relevant for
crowdfunding.

What
is crowdfunding?

The
term emerged from the field and generally refers to open calls to the wider
public to raise funds for a specific project. Often these calls are published
and promoted through the internet and with the help of social media, and are
open only for a specified time period. The funds are typically raised from a
larger number of contributors in the form of relatively small contributions,
but exceptions exist.

The
expression "crowdfunding" refers merely to a channel of financing,
which can be used in many different ways. Donations can be collected from
people, which would qualify as donation-based crowdfunding if collected
for a specific project during a specified time period promoted through internet
and social media.[8]
But crowdfunding campaigns can also offer contributors something in exchange.
We can talk about rewards-based or pre-sales crowdfunding when
contributors get in return something symbolic,  like the opportunity to
participate in the cultural experience they finance (e.g. appearing as an extra
in a film), or a product that was developed and produced with the funds raised.
All of the above forms of crowdfunding can be described as "crowd
sponsoring".

Other
crowdfunding campaigns offer some form of financial return. Profit-sharing
schemes would promise a part of future profits made by the project that is
being financed.[9]
Securities-based crowdfunding involves issuing equity or debt to
contributors.[10]
The difference from an IPO for example is that the shares issued are typically
not traded on a secondary market and there is no underwriting involved.
Profit-sharing and securities-based crowdfunding can be described as "crowd
investing". Finally "crowd lending" campaigners
borrow money from the people and promise to pay back the capital on specified
terms with (or in certain cases without) interests. Examples include consumers
borrowing lower amounts of money from the crowd to renovate their home, finance
studies, etc., or businesses borrowing to finance some new operations.

These
are the main models used by crowdfunding campaigns today. But crowdfunding is
still in its early stage of development and therefore these models might evolve
in the future.

This Communication seeks to contribute to
support the emergence of crowdfunding activities, with the following
priorities:

·
Establishing an Expert Group on Crowdfunding to
provide advice and expertise to the Commission in this area. In particular, the
Expert Group should provide advice to the Commission to explore the potential
of establishing a "quality label" to build trust with users and
provide expertise to the Commission in promoting transparency, best practices
and certification;

·
Raising awareness with regard to crowdfunding,
promoting information and training as well as raising standards; and

·
Mapping national regulatory developments and holding
regulatory workshops to ensure an optimal functioning of the internal market,
and to assess if regulatory intervention is necessary at EU level.

2.
Why crowdfunding?

Crowdfunding can offer various benefits to a
large spectrum of users. This is partly explained by its flexibility, community
engagement, and the variety of financing forms it can offer. While donations,
rewards and pre-sales models do not entail any financial return to contributors,
profit-sharing, lending and investment in securities models involve the prospect
of financial return. The first category can be referred to generally as crowd
sponsoring, while the latter can be described as crowd lending or crowd
investing (including profit sharing). The campaigners collecting funds can include
SMEs, startups, micro-entrepreneurs, social entrepreneurs, the self-employed, the
cultural and creative sectors, public authorities, innovative or environmental projects,
public interest bodies, researchers, consumers or the unemployed.

Access to finance is one of the most pressing
problems for SMEs who report a deterioration in public financial support
(-13%), access to loans (‐11%), trade credit (-4%) and the willingness of
investors to invest in equity (-1%).[11]
Many projects' demand for financing is not met by any existing sources of
finance, which is referred to generally as the financing gap. Some segments of
the economy, such as social enterprises or the cultural and creative sector, do
not find many responses tailored to their needs, due to their specific
characteristics including social objectives or the dependence on intangible
assets and the high uncertainty of market demand.[12] Crowdfunding
matches small - or even bigger – contributors and investors directly with the
projects in need of funds, mainly in the early stages.

Crowdfunding can foster entrepreneurship not
only in terms of increased access to finance, but also as an additional market
testing and marketing tool, which can help entrepreneurs acquiring relevant
knowledge of customers and media exposure. The experience with such campaigns
also build employability skills[13]
while successful campaigns provide a valuable role model to other
'entrepreneurs to be'.

From the contributors'
perspective, this new form of financing offers direct choice over where to put
one's money and a sense of involvement with the project. People who contribute
might also get a different perspective on - and more direct contact with -
entrepreneurs, which may further promote a culture of entrepreneurship. Contributors
often also form a community to back the financed project, or might supply
non-financial resources in the form of crowd-sourcing.[14]

Crowdfunding has also high potential benefits
for innovation, research and development, and it could contribute to
growth, community development and job creation[15] while financing innovative projects that do not have the level of
maturity that traditional financial market sources require. Compared to other
types of finance, it can also reduce costs and administrative burden for
enterprises, notably SMEs.

3.
Key challenges for crowdfunding in the EU
3.1.
Lack of transparency on the applicable rules
3.1.1.
All types of crowdfunding

The different forms of crowdfunding referred to
above show differences in user groups, risks, complexity and purpose, which
warrant a distinction among these various forms, and, importantly, a
distinction between financial and non-financial return models. Crowdfunding
with financial returns is slightly less well-known and is considered to carry
higher risks for contributors who take the position of investors. The main
issues EU legislation addresses with regards to all types of crowdfunding include
anti‐money laundering, advertising, consumer protection and – where relevant –
intellectual property protection.

A number of stakeholders referred to a
potential uneven playing field as a result of current differences in anti-money
laundering rules. Depending on where the payment service provider is located,
the platform may be required to perform checks on the flow of funds at
different transaction thresholds. Proposed amendments to the Anti-Money
Laundering Directive and Regulation 1781/2006 are currently under negotiation
by the co-legislators.[16]
These amendments are expected to address the above issue through a uniform
transaction threshold across all Member States, currently still under
discussion, for customer due diligence measures in the case of transfers of
funds.

20% of project owners responding to the
questionnaire signalled that the risks of insufficient intellectual property
protection were too high. Innovative projects have to disclose their ideas in
order to attract contributors. However, by disclosing an invention without
sufficient patent protection they run the risk of someone making use of their
ideas. One of the major issues encountered is the current fragmented patent
system in Europe. Once the current reform of the patent system[17] is in
place, it will be possible to obtain a European patent with unitary effect on a
one-stop shop basis, providing cost advantages and reducing administrative
burdens.

Further EU legislation may be applicable to crowdfunding,
depending on the actual business model used. For example platforms charging
money to successfully financed projects may engage in e-commerce and thus fall
under the E-commerce Directive[18].
The Directive on misleading and comparative advertising[19] provides
minimum harmonisation for misleading marketing practices in a business to
business context. Consumers are protected against misleading and aggressive
crowdfunding practices by the Directive on unfair commercial practices[20],
prohibiting certain marketing practices. If standard terms and conditions used
by crowdfunding operators contain unfair clauses, then these are not binding on
participating consumers under the Unfair Contract Terms Directive[21]. Further,
EU state aid and competition rules also apply to crowdfunding activity.

Even where EU legislation does not apply,
different national rules might be in place. This is the case in particular for
charitable giving and donations, rewards-based and pre-sales models of
crowdfunding.

3.1.2.
Financial return crowdfunding (crowd lending and
crowd investing)

Financial returns campaigns and
platforms may be subject to further rules at both EU and national level, again
depending on the specific business model used.

The relevant EU regulatory framework includes:
the Directives on Prospectus[22],
Payment Services[23],
Markets in Financial Instruments[24],
Capital Requirements (CRD IV)[25],
Alternative Investment Fund Managers[26],
Consumer Credit[27]
and Distance Marketing of Financial Services[28]
and the Regulations on Capital Requirements[29],
European Venture Capital and European Social Entrepreneurship Funds[30].

At national level different additional rules may
apply. The European Securities and Markets Authority (ESMA) and the European
Banking Authority (EBA) carried out an information gathering exercise in 2013
to better understand how the current regulatory framework applies to crowdfunding
in each Member State.

Several Member States have sought to address
concerns around crowdfunding with financial return through guidelines (e.g. in Germany, the Netherlands, Belgium). Others (Italy, the UK, France and Spain) are considering, or
have already taken, regulatory action to facilitate this new form of financing,[31] while
also aiming to adequately protect investors. The danger is that too burdensome
and premature regulatory action could stymie the development of crowdfunding,
while too lax policies could lead to losses to investors, harming consumer confidence
and trust in crowdfunding. Issues here include whether existing national or EU
legislation is adequately tailored to the needs of crowdfunding, or are there
rules that are unnecessarily burdensome in the crowdfunding context and should
be adapted to the needs of users to help crowdfunding fulfil its potential, in
particular for SMEs. For the moment Member States with legislative initiatives
propose different solutions to the above challenges. Without prejudging how
best to strike the right balance, the different approaches may create legal
uncertainty as to what rules apply to which forms, despite recent initiatives
that aim to gather legal information.[32]
The public consultation confirmed the importance of legal clarity for all
stakeholders. In addition divergent approaches among national frameworks might
also fragment the internal market by limiting the provision of services across
Member States by crowdfunding platforms and harm the potential growth of
crowdfunding in Europe.

The Commission will continue to monitor the
market and, based on the different experiences, assess the need for regulatory
action as a response to changing circumstances. Information sharing about
national regulatory practices could both help to spread best practices and
potentially identify discrepancies among national approaches which could
generate obstacles.

3.2.
How does crowdfunding work in the Internal
Market?
3.2.1.
Crowdfunding with non-financial returns (crowd
sponsoring)

The consultation results showed that the
internal market for crowdfunding with non-financial returns works quite well.
81% of non-financial returns platforms already operate cross-border, while 14%
would like to do so in the future. Only about one-third of stakeholders expressed
support for EU action on non-financial return crowdfunding to facilitate market
access (around 35%) or to better protect contributors (below 30%). Those
stakeholders who expressed support for EU measures to facilitate cross-border
activity for non-financial return models often referred to legal
uncertainty as the main obstacle.

3.2.2.
Crowdfunding for financial returns (crowd
lending and crowd investing) – market access with a high level of investor
protection

The public consultation seems to indicate that
the internal market may work less well for financial-return platforms. Only 38%
of financial return platforms answering the consultation operate cross-border
while almost half of them would like to extend their business to other EU
Member States in the future.

44% of all financial returns platforms claim
the lack of information about applicable rules prevents them from operating in
more than one EU country. 27% of them also quoted the high costs of getting an
authorisation in another Member State as a reason for only domestic operations.

Half of respondents recognised the need for EU
action on financial return crowdfunding. Market access and investor protection
appear to be equally important considerations: 49% called on the EU to promote
the single market for financial return crowdfunding and 51% saw a need for EU
action to ensure appropriate investor protection for lending and securities
crowdfunding. Respondents also highlighted the risks for contributors in the
crowd lending and crowd investing models (e.g. loss of invested capital, risk
of fraud), as well as the need for transparency on platform charges, interest
rates, and on the expected yields.

A large majority of stakeholders' agreed that
platform managers involved in lending- and investment models should be required
to inform contributors of investment and credit risks and provide advice on
investment diversification. Potential contributors might not get involved in
crowdfunding activity because of concerns over risks. The main issues here
include different individual investment limits in different countries, the
exercise of shareholder voting rights, the threshold for prospectus
requirements, the rules concerning transparency, investment suitability tests,
client money protection and investment advice.

3.3.
How does crowdfunding work within the financial
ecosystem?

Crowdfunding is still a young and evolving form
of finance that should be further explored in the context of the financial
ecosystem. While crowdfunding with non-financial returns is important in both its
volume and impact (most crowdfunding campaigns take this form, with many having
social objectives), financial return crowdfunding is also expanding and caters
for the specific financing needs of many entrepreneurial projects or private consumers.

Crowdfunding is an alternative form of
financing that can complement other forms of traditional financing. As it was
referred to above, it can contribute to addressing access to finance problems
and help start-ups move up the "funding escalator". A quarter of
established banks replying to the consultation stated an interest in engaging
in crowdfunding in the future, which offers the possibility of a regulated
financial institution giving credibility to a platform and its projects,
increasing trust. However, it also raises the questions of increased costs and
decreased competition between traditional and new actors in the financing sphere.

Stakeholders responding to the public
consultation thought that crowdfunding could deliver significant benefits for
innovation. There is currently little information available on the role crowdfunding
could play in financing research and innovation.[33]

A widely discussed issue in this regard is the
divergent tax treatment of contributions across Member States and the influence
this may have on people's and companies' choice of where to put, invest or
donate money. Donations and certain forms of financial investments (start-ups,
research and development (R&D) activities, etc.) are tax deductible in some
Member States, but not in others. The effectiveness and use of tax incentives throughout
the EU should be better understood.

The European Commission has commissioned a
study on the exchange of good practices on R&D tax incentives'
effectiveness and design of tax incentives, foreseen for 2014. This study will
provide an overview of R&D tax incentives schemes for EU Member States and
selected members of the OECD, give an assessment of the effectiveness of
R&D tax incentives by reviewing existing empirical evidence, and promote the
exchange of knowledge about good practices. This might be of particular
relevance for crowdfunding and promoting research, development and innovation
through CF platforms.

3.4.
Promoting crowdfunding through raising awareness
and building confidence

There is still a general lack of awareness about
crowdfunding in Europe. Almost half of respondents favour some form of
awareness-raising at EU level. Stakeholders also showed an interest in a single
source of information on the opportunities of crowdfunding, to enhance its
visibility.

Increased awareness is not the only factor needed
for crowdfunding to succeed. A good understanding of how crowdfunding works,
what it can deliver and what the risks might be is also key to establishing
trust with both contributors and campaigners. Sustainable growth in
crowdfunding is only possible if users have confidence in it. Running
successful crowdfunding campaigns also depends on campaigners having the
necessary skills and training, as well as support offered by platforms and
other actors.[34]
Project owners may need education about the use of crowdfunding, about its
potential risks, and potentially also about planning or project management.

Given that there are certain risks in
crowdfunding, in this early stage of development there is also a need to
enhance the recognition of platforms. Establishing a quality label would help this
recognition and build confidence. A label would signal compliance with certain
standards, for example to reduce the risks of fraud, and would build trust with
users. In some countries, such as the UK, self-regulatory bodies have already
put in place rules that platforms can comply with and obtain the quality label
of the association.

3.5.
Possibilities for matched (public and private)
financing

Due to its limited size, crowdfunding cannot be
expected to solve all various forms of access to finance issues on its own.
Possibilities for public funding alongside crowdfunding could therefore be
further explored at both national and EU level in duly justified cases where a
market failure can be demonstrated. Matched financing could be provided either
in the form of co-investment in projects alongside private contributors[35], as
loan guarantees to crowd lending transactions, or directly to crowdfunding
platforms. The newly adopted state aid rules applicable to risk finance[36]
extend the scope of eligible undertakings by including SMEs, small midcaps and
innovative midcaps to improve access to funding for companies that though
viable, are faced with a market failure in accessing the necessary finance. The
risk finance rules applicable to alternative trading platforms can, by analogy,
apply to certain types of crowdfunding platforms. Any support with state
resources shall comply with competition rules, and in particular the State aid
rules applicable to risk finance.

4.
Way Ahead

Crowdfunding
offers numerous advantages to a variety of user groups and it is a promising
source of funding for many types of actors that do not find solutions suited to
their financing needs.

Considering
the potential and the key challenges of this emerging phenomenon, the European
Commission would like to develop, in cooperation with stakeholders, a common
understanding at EU level and prepare the ground for possible future actions.

To get a better overview
on how crowdfunding fits in the wider financial ecosystem and which projects
use what type of crowdfunding, the European Commission will carry out a study
in 2014. In a separate study the Commission will explore the potential of
crowdfunding to support research and innovation, and in the context of this
study it will reflect on the role which tax incentives could play in relation
to crowdfunding for R&D and innovation.

To support policy
development in this area, the Commission will set up the European Crowdfunding
Stakeholder Forum as an expert group of high level representatives of
associations of concerned stakeholder groups and national authorities to help it
in raising awareness, providing information and training modules for project
owners, promoting transparency and exchange of best practice, and identifying
issues that may need to be addressed in order for crowdfunding to flourish
while taking into account the interest of contributors.

The Commission will
closely follow efforts by industry associations to develop standards at
national and at European level on transparency and best practices, with the aim
of informing users (both project owners and contributors), to protect
contributors from fraud and to ensure an adequate complaint handling mechanism.
The European Commission will launch a study to examine the existing national
self-regulatory bodies and their rules, as well as their effectiveness and
limitations, and will explore the potential of establishing a European quality
label.

The Commission will closely
monitor developments around crowdfunding in the context of the good functioning
of the internal market. It will hold regulatory workshops with a view to
discussing obstacles to cross-border activities. Where relevant, the Commission
will examine the need to issue recommendations through the Single Market Report
or the Network of the SME Envoys[37]
which monitors the implementation of the Small Business Act, or the
Digital Agenda for Europe, to invite Member States to avoid inconsistencies in
national approaches that might hinder the Internal Market.

Crowdfunding
as an emerging but still relatively small source of private financing cannot be
expected to replace public funding for projects having difficulties in
accessing finance. The new European state aid rules facilitate the matching of
public funding with private resources into companies. Therefore, consideration
could be given to the possibility of using public funds co-invested with
private funds channelled via crowdfunding, provided that State aid rules, in
particular the Guidelines on State aid to promote risk finance investments, and
the legal conditions of transparency and accountability for the use of public
funds are met, and, where applicable, in accordance with the requirements of the
Financial Regulation.

The
Commission will keep this emerging sector under close monitoring with the
support of the Forum, and will regularly assess - based
on the results of the studies, the work of various stakeholders and the
regulatory workshops - the state of EU and domestic regulatory frameworks
applicable to crowdfunding, and consider whether further EU action is necessary.
In particular at the time of scheduled reviews of existing legislation, the
Commission will consider whether it may be appropriate to calibrate
requirements to the specific features of crowdfunding with financial returns. Any future
EU legislative action or other type of action with
significant impact would be subject to a
prior public consultation and impact assessment.

Finally,
since crowdfunding is a global activity and other jurisdictions, such as the US, have also started regulating it, the Commission will closely follow international
developments and will support efforts to promote regulatory convergence of
approaches at international level.[38]

The
Commission will report back on progress in the course of 2015.

[1] Based
on an industry estimate: Massolution (2013) Crowdfunding Industry Report 2012
at: http://www.crowdsourcing.org/research.

[2] European Banking
Federation Facts and Figures (2012) at: http://www.ebf-fbe.eu/uploads/FF2012.pdf;
CSES (2012), Evaluation of EU Member States’ Business Angel Markets and
Policies Final report; EVCA Yearbook 2012 at:
http://www.evca.eu/uploadedfiles/home/press_room/Yearbook_2012_Presentation_all.pdf

[3] Industry estimates
show that in 2012 some 470 000 European projects were financed successfully
through crowdfunding. Massolution (2013)

[4] COM(2013) 150 final 
25.3.2013

[5] Crowdfunding can be
followed by other forms of financing, such as bank financing, angel or venture
capital, or an Initial Public Offering (IPO).

[6] Held between 3
October and 31 December 2013.

[7]
http://www.crowdfundingnetwork.eu/

[8] Such donations are
monetary contributions, typically – but not exclusively – for charitable
purposes.

[9] For
example future profits from the sales of a new mobile application, the
development of which was financed by crowdfunding.

[10] For example an
environmental project might issue debt instruments to build renewable energy
generators or an innovative start-up might issue shares to raise the necessary
funds to start the business.

[11] ECB-European
Commission SMEs’ Access to Finance survey 2013  http://ec.europa.eu/enterprise/policies/finance/files/2013-safe-analytical-report_en.pdf

[12] COM(2012)537, 
Communication on promoting cultural and creative sectors for growth and jobs in
the EU. See also "Survey on access to finance for cultural and creative
sectors"(2014) http://ec.europa.eu/culture/key-documents/documents/access-to-finance-culture-and-creative-sector_en.pdf
. A new
EU Programme for Employment and Social Innovation will offer support to social
enterprises. http://ec.europa.eu/social/main.jsp?catId=1084&langId=en

[13] Green A. et al (2014)
Explanatory Research on Internet Work Exchanges and Employability, Analysis and
synthesis of quantitative evidence on crowdsourcing for work, funding and
volunteers. Steward J (Ed). JRC Scientific and Policy Report Series, EUR 26423
EN. Institute for Prospective Technological Studies, Joint Research Centre,
European Commission. Available at: http://ftp.jrc.es/EURdoc/JRC85646.pdf

[14] Calls to the public
to supply non-monetary contributions to the realisation of a project (such as
skills, commercial networks, etc.)

[15] In 2012 in Spain crowdfunding created an estimated 7,500 direct ‘crowd-jobs’ through some 2,800
successful crowdfunding projects. Ramos & Gonzalez (2013) Crowd-Funding as
a new economic instrument for economic growth and employment. Paper presented
in the seminar “Alternative ways of finance in the digital era”. Ateneu
Barcelonès May 2013.

[16] Based on Commission's
proposals COM (2013) 44 and COM (2013) 45

[17] On 17 December 2012,
the Regulations creating unitary patent protection in the EU were adopted in
enhanced cooperation between 25 Member States. An international agreement among
the Member States setting up a Unified Patent Court is currently in the process
of ratification.

[18] Directive 2000/31/EC of
the European Parliament and of the Council of 8 June 2000 on certain legal
aspects of information society services, in particular electronic commerce, in
the Internal Market (OJ, 17.07.2000, L 178/1)

[19] Directive 2006/114/EC
of the European Parliament and of the Council of 12 December 2006 concerning
misleading and comparative advertising (OJ 27.12.2006, L376/21)

[20] Directive 2005/29/EC of
the European Parliament and of the Council of 11 May 2005 concerning unfair
business-to-consumer commercial practices in the internal market and amending
Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of
the European Parliament and of the Council and Regulation (EC) No 2006/2004 of
the European Parliament and of the Council (OJ 11.06.2005, L149/22)

[21] Council
Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 21.4.1993,
L 95/29)

[22] Directive 2003/71/EC of
the European Parliament and of the Council of 4 November 2003 on the prospectus
to be published when securities are offered to the public or admitted to
trading and amending Directive 2001/34/EC (OJ 31.12.2003, L 345/64)

[23]
Directive 2007/64/EC of the European Parliament and of the Council of 13
November 2007 on payment services in the internal market amending Directives
97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC (OJ,
5.12.2007, L319/1). The Payment Services Directive might apply also to crowd
sponsoring, in case the business model adopted is such that it falls under the
scope of this instrument.

[24] Directive 2004/39/EC of
the European Parliament and of the Council of 21 April 2004 on markets in
financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and
Directive 2000/12/EC of the European Parliament and of the Council and
repealing Council Directive 93/22/EEC (OJ, 30.04.2004, L 145/1)

[25] Directive 2013/36/EU of the
European Parliament and of the Council of 26 June 2013 on access to the
activity of credit institutions and the prudential supervision of credit
institutions and investment firms, amending Directive 2002/87/EC and repealing
Directives 2006/48/EC and 2006/49/EC (OJ 27.06.2013, L176/338)

[26] Directive 2011/61/EU
of the European Parliament and of the Council of 8 June 2011 on Alternative
Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and
Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (OJ 1.07.2011, L 174/1)

[27] Directive 2008/48/EC of
the European Parliament and of the Council of 23 April 2008 on credit
agreements for consumers and repealing Council Directive 87/102/EEC (OJ
22.05.2008, L133/66)

[28] Directive 2002/65/EC 
of the European Parliament and of the Council of 23 September 2002 concerning
the distance marketing of consumer financial services and amending Council
Directive 90/619/EEC and Directives 97/7/EC and 98/27/EC (OJ 9.10.2002,
L271/16)

[29] Regulation (EU) No
575/2013 of the European Parliament and of the Council of 26 June 2013 on
prudential requirements for credit institutions and investment firms and
amending Regulation (EU) No 648/2012 (OJ 27.06.2013, L176/1)

[30] Regulation (EU) No
345/2013 of the European Parliament and of the Council of 17 April 2013 on
European venture capital funds (OJ 25.04.2013, L115/1); Regulation (EU) No
346/2013 of the European Parliament and of the Council of 17 April 2013 on
European social entrepreneurship funds (OJ 25.04.2013, L 115/18).

[31] In line with the EU
Entrepreneurship 2020 Action Plan  http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2012:0795:FIN:EN:PDF

[32] ECN (2013),
"Review of Crowdfunding Regulation" at:
http://www.europecrowdfunding.org/2013/10/review-crowdfunding-regulation-2013

[33] European Expert
Network on Culture  report,  Crowdfunding schemes in Europe (2011) http://www.eenc.info/wp-content/uploads/2012/11/DR%C3%B6thler-KWenzlaff-Crowdfunding-Schemes-in-Europe.pdf
.

[34] Ramos, J. (2014)
Crowdfunding and the Role of Managers in Ensuring the Sustainability of
Crowdfunding Platforms. Stewart J (Ed). JRC Technical Report Series, JRC
Institute for Prospective Technological Studies, European Commission.
http://is.jrc.ec.europa.eu/pages/EAP/eInclusion/employability.html ;

[35] In such cases care
should be taken that the popularity of a project as measured by its success in
crowdfunding may not be the best selection condition for public spending.

[36] Communication from
the Commission, "Guidelines on State aid to promote risk finance
investments", C(2014) 34/2, Brussels, 15.01.2014

[37]
http://ec.europa.eu/enterprise/policies/sme/small-business-act/sme-envoy/index_en.htm

[38] Work is also
undertaken by IOSCO – see: IOSCO (2014) "Crowd-funding: An Infant Industry
Growing Fast" SWP3/2014.