ECSP Regulation and the Crowdfunding Act – FAQ
- Will the crowdfunding platforms operated for private (consumer) fundraising be covered by crowdfunding regulations?
- No, the ECSP Regulation only applies to crowdfunding services for business ventures (it does not apply to services provided to consumer project owners).
- Does running platforms for the so-called donation crowdfunding require a license of the Polish Financial Supervision Authority?
- No, the crowdfunding license will only be required for the so-called loan or investment crowdfunding.
- What are the acceptable legal forms of doing business as a crowdfunding provider?
- In compliance with the ECSP Regulation, the crowdfunding license may be granted to any legal entity. The current draft crowdfunding act does not specify what specific types of legal entities will be able to apply for such license. However, it may be assumed that these will be corporations (limited liability company, joint stock company or simple joint stock company).
- What is the minimum amount of the so-called regulatory capital required for the crowdfunding provider to operate?
- The ECSP Regulation does not provide for an absolute requirement relating to the minimum share capital of the crowdfunding provider. It is required to have at all times prudential measures of not less than EUR 25,000 in principle. This requirement may be satisfied either by having sufficient equity capital or adequate insurance policy or comparable guarantee.
- How long does it take to process the crowdfunding license?
- The ECSP Regulation stipulates that a decision to grant or deny the crowdfunding license should be issued within three months of receiving a complete application. Therefore, in practice, it can be assumed that the actual deadline for issuing a decision will be more than 3 months, as it is a rule in licensing proceedings before the PFSA that additional requests are sent to the applicant to supplement the application in connection with both formal and substantive issues.
- Is it possible to operate abroad on the basis of the crowdfunding license issued by the Polish Financial Supervision Authority?
- Yes, an entity holding a permit issued by the Polish Financial Supervision Authority to provide crowdfunding services will be able to provide crowdfunding services in other EEA Member States on the basis of a so-called uniform license. To this end, the provider should submit with the Polish Financial Supervision Authority a list of Member States in which they intend to provide the crowdfunding services, together with the identity of the persons responsible for providing the services in such Member States and the date on which they plan to start providing the services.
- Will it be possible to offer shares in a limited liability company as part of the investment crowdfunding?
- No, under the current draft crowdfunding act, a possibility of crowdfunding by offering the subscription or purchase of shares in a limited liability company will be excluded. Additionally, a 2-year transitional period has been provided for to allow the existing operators of crowdfunding platforms engaged in such activities to continue them under the existing rules (i.e. under the freedom of economic activity) until 11/10/2023.