The Polish government plans to regulate the functioning of crowdfunding platforms through, inter alia, the establishment of the Polish Financial Supervision Authority (KNF) as a supervisory authority over service providers and the introduction of civil and criminal liability for the accuracy of information in documents related to the crowdfunding offer, results from the list of legislative and program works of the Council of Ministers.
Adoption of the draft act on supervision over crowdfunding service providers for business ventures by the Council of Ministers is planned for Q3.
“The purpose of the draft law is to ensure the application of Regulation (EU) 2020/1503 of the European Parliament and of the Council of October 7, 2020 on European providers of crowdfunding services for business ventures […] and the implementation of the Directive of the European Parliament and of the Council (EU) 2020 / 1504 of 7 October 2020 […] on markets in financial instruments “, the list reads.
The provisions of the regulation introduce uniform rules for crowdfunding in the European Union (European Crowdfunding Service Provider, ECSP), the so-called crowdfunding. The regulation grants crowdfunding service providers for business ventures the freedom to provide services throughout the European Union, while imposing on them the need to meet certain organizational obligations.
The regulation applies to crowdfunding platforms operating in the so-called an equity model in which the investor, in return for a payment, includes securities (most often shares) issued by the project owner and platforms that facilitate the granting of social loans.
The regulation also contains solutions increasing the level of investor protection. EU crowdfunding rules are to be applied across the EU from November 10, 2021.
The regulation obliges EU Member States to introduce solutions in national law that ensure effective application of the regulation’s provisions.
Therefore, the draft act on supervision over providers of crowdfunding services for business ventures:
– will appoint the Polish Financial Supervision Authority (KNF) as the competent authority to supervise the providers of crowdfunding services for business ventures,
– will grant the KNF appropriate supervisory powers (e.g. to suspend specific crowdfunding offers or suspend business operations by suppliers and to cooperate with judicial and supervisory authorities from other EU Member States)
– introduce appropriate administrative and criminal sanctions for non-compliance with the provisions of the ordinance or the act
– introduce civil and criminal liability for the correctness and truthfulness of the information provided in information documents prepared in connection with the crowdfunding offer
– introduce provisions on professional secrecy and rules for storing documentation related to the provision of crowdfunding services for business ventures
– simplify some disclosure requirements on the issuer of securities – in the case of public offerings carried out outside crowdfunding platforms but through an investment firm, the issuer will only be able to prepare a key investment information sheet instead of an information memorandum
As of November 10, 2023, the amount threshold for proceeds from the issue of securities, which exempts the company from the obligation to draw up a prospectus, will be increased from EUR 2.5 million to EUR 5 million. Public bids, the expected proceeds of which will be between EUR 2.5 million and EUR 5 million, will be subject to the obligation to prepare an information memorandum (or key investment information sheet, in the case of offers through an investment firm) on that date.
According to the regulation, owners of projects financed on crowdfunding platforms will be able to raise funds up to EUR 5 million without the need to prepare a prospectus. However, for a period of 2 years from the date of application of the regulation (i.e. until November 9, 2023), in countries where the threshold amount of inflows from the issue of securities, above which the prospectus must be drawn up, is less than EUR 5 million, it is allowed to conduct crowdfunding offers without the need to draw up a prospectus only up to a value below the threshold provided for in national law.
The draft act will amend the act of 29 July 2005 on trading in financial instruments by excluding the application of the provisions of this act to providers of crowdfunding services for business ventures.
Source: ISBnews
