Germany expected to ease liability regime for crowdfunding platforms
German legislators are expected to ease the existing liability regime for crowdfunding platforms in the country, enabling more of them to pursue an EU licence.
European Crowdfunding Service Providers Regulation (ECSPR) licences have been available for some time but as yet not a single German platform has been awarded one.
Yesterday, the German Crowdfunding Association revealed there had been a breakthrough in the regulatory process as a draft of the country’s Future Financing Act indicates a will to loosen the restrictive liability regime.
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The rules on liability were tightened as part of Germany’s ECSP-implementation law, making them far less favourable to crowdfunding platforms than they were for asset investments and securities.
The harsh rules are thought to be the reason that few German platforms have applied for the ECSPR licence, and none have been granted one in the country.
The German Crowdfunding Association said the “prohibitive liability rules led to considerable legal uncertainty for potential platforms and issuers”.
“The changes to the civil liability regime will be withdrawn with the draft bill of the Federal Ministry of Finance,” the update added.
It means the core liability regime for asset investments will be used, making issuers liable only in cases of gross negligence. It also no longer holds the natural persons owning the issuer will be personally liable.
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The changes meet two key demands made by the German crowdfunding industry. “We will now work to ensure that the draft bill is passed by the cabinet as it stands and likewise adopted by the Bundestag,” the German Crowdfunding Association said.
At present, 21 platforms have been licensed to operate under the ECSPR. The new EU-wide rules are set to harmonise the industry across the bloc.
The latest firms to gain permissions are Evenfi Fintech in Spain; Bolero Crowdfunding in Belgium; Sweden’s SaveLend; Soul Invest in France; and Urbanitae Real Estate Platform in Spain.
The new regulation allows P2P and crowdfunding platforms to operate in all 27 European member states and to carry out cross-border transactions.
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