ECSP Regulation and Crowdfunding Act – impact and requirements
- The activities of the crowdfunding service providers will be supervised by the Polish Financial Supervision Authority. As part of the supervisory responsibilities, duties will be imposed on the crowdfunding service provider with respect to the Polish Financial Supervision Authority:
- submit annual reports listing projects funded through its crowdfunding platform
- transfer information on the provision of crowdfunding services for economic undertakings, the financial situation of the provider and events that may affect their activity in the form of providing crowdfunding services or their financial situation (the detailed scope and deadlines for the transfer of information is to be specified in the regulation of the minister competent for financial institutions)
- inform about the intention to start the activity consisting in providing individual loan portfolio management services – at least 3 months before the date of their commencement
- in the case of the provision of the loan facilitation service, the delivery of the key investment information sheet at least 7 business days prior to the date on which the sheet is delivered to potential investors
- in the case of the provision of the individual loan portfolio management service as part of the loan facilitation service, the delivery of a platform-level key investment information sheet at least 7 business days prior to the date on which the sheet is delivered to potential investors
- allow authorized employees of the Polish Financial Supervision Authority to enter the seat or premises of the provider and inspect the stored documentation related to the activities of the crowdfunding service provider
- prepare and provide – upon request of the Polish Financial Supervision Authority – copies of documentation on a permanent data carrier and provide written or oral explanations within the scope of the supervision activities of the Polish Financial Supervision Authority to ensure compliance with the Crowdfunding Act and the ECSP Regulation
- pay annual fees to cover the costs of supervision
- in the event of non-performance or improper performance of the obligations set out in the Crowdfunding Act and the ECSP Regulation – take corrective measures specified by the Polish Financial Supervision Authority by way of a decision, such as cessation of actions resulting in violations and not undertaking such actions in the future
- pay a fine for failure to perform or inappropriate performance of duties specified in the Crowdfunding Act or the ECSP Regulation – in case such a fine is imposed by the Polish Financial Supervision Authority
- A number of obligations will be imposed on the crowdfunding service provider in relation to customers (investors and draft projects owners):
- inform customers (including through the targeting of marketing communications) in a fair, clear and not misleading manner about the costs, financial risks and fees associated with the crowdfunding services or investments, project selection criteria, nature of crowdfunding services and risks associated with such services
- inform customers that crowdfunding services are not covered by a deposit guarantee scheme and that transferable securities or instruments purchased through the provider’s platform are not covered by an investor compensation scheme
- identify potential inexperienced investors and evaluate the provided crowdfunding services in terms of their suitability for an inexperienced investor (knowledge test updated every 2 years and loss capacity simulation updated annually)
- ensure a reflection period of 4 calendar days for inexperienced investors, during which time they may withdraw their investment offer or statement of interest in a crowdfunding offer, at any time without stating a reason therefor and without penalty
- conduct a credit risk assessment related to the project or project owner – where the crowdfunding service provider determines the price of the crowdfunding offer
- conduct at least minimal due diligence on project owners to obtain the following:
- evidence of the criminal records of the project owner,
- evidence that the project owner is not located in a jurisdiction that is reluctant to cooperate with the EU or in a high-risk third country
- provide detailed information regarding each individual loan portfolio on an ongoing basis and upon investor request – in the case of providers offering the individual loan portfolio management services
- prevent conflicts of interest, in particular by not allowing persons related to the provider to act as project owners (their shareholders, board members, employees, etc.)
- provide investors with the key investment information sheet prepared by the project owner for each crowdfunding offer
- provide the investors with the translation of the key investment information sheet into the official language of the relevant Member State – when the provider promotes the crowdfunding offer in another Member State
- require the project owner to notify the provider of any change to the information contained in the key investment information sheet and to promptly inform the investors of such changes