COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to Article 294(6) of the Treaty on the Functioning of the European Union concerning the position of the Council on the adoption of a regulation of the European Parliament and of the Council on European crowdfunding service providers for business and amending Regulation (EU) 2017/1129 and Directive (EU) 2019/1937 and a Directive amending Directive 2014/65/EU on markets in financial instruments This Communication refers to both COM(2018) 113 final - 2018/0048(COD) and COM(2018) 99 final - 2018/0047(COD)
Date: 2020-07-29
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: approximation of laws, crowdfunding, financial legislation, financial services, innovation, investment, investment company, provision of services, small and medium-sized enterprises, start-up

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   EUROPEAN COMMISSION  Brussels, 29.7.2020  COM(2020) 356 final 2018/0047 (COD)  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT  pursuant to Article 294(6) of the Treaty on the Functioning of the European Union  concerning the position of the Council on the adoption of a regulation of the European Parliament and of the Council on European crowdfunding service providers for business and amending Regulation (EU) 2017/1129 and Directive (EU) 2019/1937 and a Directive amending Directive 2014/65/EU on markets in financial instruments  This Communication refers to both COM(2018) 113 final - 2018/0048(COD) and COM(2018) 99 final - 2018/0047(COD)    
 
2018/0047 (COD) 

COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT 

pursuant to Article 294(6) of the Treaty on the Functioning of the European Union 

concerning the 

position of the Council on the adoption of a regulation of the European Parliament and 
of the Council on European crowdfunding service providers for business and amending 
Regulation (EU) 2017/1129 and Directive (EU) 2019/1937 and a Directive amending 
Directive 2014/65/EU on markets in financial instruments 

This Communication refers to both 
COM(2018) 113 final - 2018/0048(COD) and COM(2018) 99 final - 2018/0047(COD) 

1. 

BACKGROUND 

Date of transmission of the proposal to the European Parliament and 
to the Council 
(document COM(2018) [113] final – 2018/0048 COD; COM(2018) 
[99] final – 2018/0047 COD): 

08 March 2018. 

Date  of  the  opinion  of  the  European  Economic  and  Social 
Committee: 

11 July 2018. 

Date of the position of the European Parliament, first reading: 

27 March 2019. 

Date of transmission of the amended proposal: 

N/A. 

Date of adoption of the position of the Council:  

20 July 2020. 

2. 

OBJECTIVE OF THE PROPOSAL FROM THE COMMISSION 

As  part  of  the  Capital  Markets  Union  (CMU)  and  the  Fintech  action  plans,  the  European 
Commission has presented a proposal for a regulation on crowdfunding service providers. The 
goal  of  the  proposal  is  to  provide  crowdfunding  platforms  with  an  enabling  regulatory 
framework that allows access to the entire single market through a single authorisation based 
on a single set of rules. The proposal also introduces investor protection requirements tailored 
to  the  type  of  service  covered  by  the  legislative  action.  Overall,  the  legislation  is  aiming  to 
make the cross-border offer of these financial services easier across the EU. As the EU market 
for crowdfunding is underdeveloped, the new rules have a great potential to increase access to 
innovative  forms  of  finance  for  small  and  medium  enterprises,  particularly  start-ups,  in  the 
context of the CMU and help the EU economy grow more rapidly. 

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3. 

COMMENTS ON THE POSITION OF THE EUROPEAN PARLIAMENT 

The  European  Parliament’s  first  reading  position,  adopted  on  27  March  2019,  suggested 
amendments to the Commission proposal, notably to: 

 

 

 

empower  national  competent  authorities 
to  authorise  and  supervise 
crowdfunding  service  providers  instead  of  the  European  Securities  Markets 
Authority proposed by the Commission; 

expand  the  scope  of  permitted  services  to  investment  advice  and  portfolio 
management; 

raise the threshold for the issuance of crowdfunding offers to EUR 8 000 000. 

Following the Council's adoption of its first reading position on 20 July 2020, the European 
Parliament  is  expected  to  formally  endorse  the  political  agreement  reached  in  the 
interinstitutional procedure. 

4. 

COMMENTS ON THE POSITION OF THE COUNCIL 

In  line  with  the  political  agreement,  the  Council’s  first  reading  position  introduces  a  list  of 
changes to the Commission’s proposal, which include:  

 

 

 

 

 

Establishing  a  harmonised  EU-wide  framework  under  the  licensing  and 
supervision  of  national  competent  authorities  to  replace  the  original  optional 
EU  regime  proposed  by  the  Commission  for  crowdfunding  services  provided 
by  crowdfunding  service  providers.  A  few  selected  tasks  are  left  to  the 
European  Securities  Markets  Authority,  among  which  the  preparation  of 
implementing measures, binding mediation and data collection; 

Increasing  the  issuance  threshold  to  EUR  5  million,  with  a  temporary 
derogation of 24 months for Member States whose prospectus threshold is less 
than EUR 5 million; 

Extending  the  scope  to  include  admitted  instruments  for  crowdfunding 
purposes (shares of limited liability companies); 

Extending the scope of services to include individual portfolio management of 
loans; 

Differentiating  between  sophisticated  and  non-sophisticated  investors  as  well 
as additional investor protection measures for non-sophisticated investors. 

The  Council’s  position  fully  reflects  the  political  agreement  reached  between  the  European 
Parliament  and  the  Council  on  18  December  2019.  The  Commission  believes  that  these 
amendments  to  the  proposal  do  not  undermine  its  original  policy  objectives.  Therefore,  the 
Commission can endorse the Council’s position.  

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5. 

CONCLUSION 

While there are important deviations from the original proposal, the Commission expresses a 
positive opinion on the position adopted by the Council in first reading, as the text remains in 
line with the proposal’s original objectives. Moreover, the position fully reflects the outcome 
of  the  inter-institutional  negotiations,  which  culminated  with  a  political  agreement  on  18 
December 2019.  

The  European  Parliament’s  adoption  of  the  agreed  text  in  second  reading  will  mark  an 
important  milestone  towards  delivering  on  the  shared  objectives  of  improving  access  to 
finance  for  small  and  medium  businesses,  including  start-ups  and  scale-up  companies.  In 
doing  so,  this  should  help  the  EU  economy  to  recover  even  more  rapidly  from  the  current 
economic and health crisis. 

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