The European Parliament has given provisional approval to plans to introduce new standards for crowdfunding platforms across the continent.
The European Commission believes that crowdfunding is establishing itself as an important part of the funding escalator for young companies and can provide a boost to fintech innovation in the region.
The initiative forms a key part of the Commission's 23-step fintech action plan. released in May last year.
Once adopted, the new regulatory framework will harmonise the rules for investment-based and lending-based crowdfunding platforms operating in the European Union. It will make it easier for them to operate cross-border in the EU, thanks to a single licence. It will also ensure a high-level of investor protection.
The Commission anticipates that businesses from all over Europe will be able to more easily reach out to a significantly larger pool of potential investors and thus increase their chances of success.
EU Commissioner Valdis Dombrovskis comments: "An EU crowdfunding licence would help crowdfunding platforms scale up in Europe. This will allow investors to match up with companies from all over the EU, bringing more opportunities for firms and entrepreneurs to pitch their ideas to a wider base of investors.”
The political agreement is subject to final endorsement by the European Parliament and the Council.