Further to the introduction of the EU’s Capital Markets Union economic policy initiative, which allows crowdfunding service providers to operate in the EU without needing to obtain separate authorisation in each member state, the Malta Financial Services Authority (MFSA) has introduced a new application process for the licensing of such entities.
Regulation (EU) 2020/1503 of the European Parliament lays down uniform rules across the union for the provision of investment-based and lending-based crowdfunding services related to business financing only (reward and donation-based crowdfunding, do not fall within the scope of the legislation). Said platforms will need to be authorised by the national competent authority in the EU member state in which they are established.
“This new legislation benefits the businesses that need to raise funds, the investors, through appropriate safeguards for consumer protection, and ultimately stimulates the wider economy. It also facilitates the cross-border provision of crowdfunding services in the EU, which has been one of the biggest hurdles faced by crowdfunding platforms, leading to high compliance and operational costs. We believe that Malta is well-placed to host such platforms, being a jurisdiction which is predominantly composed of SMEs and inclined towards FinTech-driven entities,” Doreen Balzan, MFSA’s head of securities and markets supervision, said.
The circular containing the overview of Regulation (EU) 2020/1503 of the European Parliament can be accessed at this link https://www.mfsa.mt/wp-content/uploads/2021/03/The-European-Crowdfunding-Service-Providers-Regulation.pdf
Further information can be obtained by contacting the authority on crowdfunding@MFSA.mt.