Crowdfunding platforms: welcome to the single European standard!

11 February 2020

Business Insight

The introduction of ECSP status is an important step forward in facilitating the development of cross-border operations. On 18 December 2019, the European institutions (European Parliament and European Council) finally agreed to establish a single regulation governing equity financing platforms dedicated to loans and investment. Below are a few details…


A new European status: ECSP status

This new single regime provides for the creation of a status for ‘European crowdfunding service providers’ or ECSP. Granted by application to the AMF in France, this will make it possible for providers to offer services throughout the EU without additional specific authorisation.

The forthcoming regulation will provide a single, standard legal framework based on shared criteria, that permits crowdfunding platforms to operate outside the country in which they are located, thus facilitating cross-border financing of companies, which is still rare today.


Such an initiative represents a major step forward for the lending and investment platforms. Today, there is no European passport system for crowdfunding platforms. To operate in a country, one must systematically approach the local regulator and sometimes face contradictory rules. This represents a major complexity.

Olivier Goy Olivier Goy -
CEO - October

Investors: ‘sophisticated’ or not?

With an eye to maximising investor protection and transparency, each platform with the status will have to provide potential investors with a sheet of key information—sufficiently clear and precise—drawn up by the project owner of each crowdfunding offer and covering project selection criteria as well as the risks associated with financing.

The proposed regulation introduces two types of investors: so-called ‘non sophisticated’ investors, who will have to pass a test to assess their level of knowledge about the risks associated with corporate financing. They will not be able to finance a project in excess of 1,000 euros (or exceeding 5% of their assets). Such investors will have four days (compared to zero today) to cancel their investment. On the other hand, so-called ‘sophisticated’ investors will no longer have an investment limit per project, whereas in France there is currently a ceiling of 2,000 euros for each project financed by an investor or lender (no limit for all projects financed).


Setting a threshold at EUR 5 million per financing offer

The ECSP status will be strictly reserved for loan and crowdfunding platforms, for offers up to 5 million euros (increased from the €1 million initially proposed by the European Commission). However, the proposed Regulation excludes donation platforms and those crowdfunding financing services provided by natural or legal persons as defined under national law.