New EU cross-border crowdfunding rules that are set to come into effect later this year have been heralded as a huge advantage for investors.
Crowdfunding and peer-to-peer lending regulations currently differ across the bloc, but the new legislation will introduce harmonised rules across every member state.
Oliver Gajda, executive director of trade body EuroCrowd, said the rules will allow lenders and borrowers to access platforms in different EU countries and will ensure that all platforms are regulated and supervised to the same standard.
Gajda said the rules will improve standards and safety for investors, while reducing fraud, and that investors will be given more information from platforms.
He said the regulations are likely to come into force in member states with no existing regulatory framework on 10 November 2021, while countries with existing rules have an extra year to comply.
“It is utterly beneficial for investors because you deal with counterparties that are all subject to similar rules,” Gajda said.
“For me, the rules are about ensuring consumer protection, ensuring as little fraud as possible, creating trust and taking comparable business practices across the union, and as an investor, you’ll be presented with a fairly similar, if not equal, set of information during the investment process.”