2 REGULATORY FRAMEWORK Crowdfunding is a societal trend that emerged as a result of the internet and social networks. It enables funds to be raised online from individuals to finance specific projects. Money is typically obtained through relatively small contributions from many people. The French authorities have established a regulatory framework that allows crowdfunding to develop in an environment that is safe for donors, lenders and investors. A new label has been created to identify platforms that comply with the new rules introduced by Order of 30 May 2014 and its Implementing Decree of 16 September A regulation for use is now available. Crowdfunding allows people who initiate a project to raise financing through the website of a crowdfunding platform, other than conventional routes such as bank loans. Depending on the type of financing offered, crowdfunding platforms may be obliged to demonstrate that they have the regulatory status needed to operate: A platform that works through subscription of securities issued by an unlisted company must be registered in France as a crowdfunding adviser (CA French Conseiller en investissement participatif or CIP ) with the ORIAS register of insurance, banking and financial intermediaries. The platform may also opt for the status of investment services provider (ISP) providing investment advice, in which case it must be authorised by the Autorité de Contrôle Prudentiel et de Résolution (ACPR). The AMF regulates CA-run platforms, while the AMF and the ACPR jointly regulate ISP platforms. If the website can be used to finance projects through loans either with or without interest, the platform must be registered with the ORIAS register as a crowdfunding intermediary (CI intermédiaire en financement participatif or IFP ). The ACPR may inspect a CI at any time. If the website proposes financing solely through donations, the platform does not have to be registered with ORIAS but may choose to register as a crowdfunding intermediaries. In this case, it has to abide by all the rules applicable to crowdfunding intermediaries. NB: If a crowdfunding website receives funds for third parties, the platform must be at least authorised by the ACPR as a payment institution (PI) or be registered as the agent of a payment services provider (PSP). The inspection powers of the ACPR and the AMF do not preclude the DGCCRF 1 from carrying out its duties. 1 Directorate General, Competition, Consumption and Fraud Prevention.
3 Click here to see whether a platform is registered as a CA ( conseiller en investissements participatifs ) or a CI ( intermédiaire en financement participatif ). Any platform that receives funds on behalf of third parties must be a PSP. It can be a: credit institution, finance company/payment institution (SF/PI) or the agent of a PSP appointed by a French institution. To see whether a platform has this status, click here; payment institution (PI) or an electronic money institution (EMI). To see whether a platform has this status, click here 2 ; the agent of a PSP appointed by an institution from a European Economic Area (EEA) country other than France. To see whether a platform has this status, check the website of the supervisor in the Member State where the head office of the institution that appointed the agent is located. Crowdfunding platforms with CI, CA or ISP status, and only these platforms, may use the following label: List of legislative and regulatory documents: - Order of 30 May 2014 on crowdfunding - Decree of 16 September 2014 on crowdfunding - Executive Order of 22 September 2014 approving amendments to the General Regulation of the Autorité de Marchés Financiers on crowdfunding - Executive Order of 24 September 2014 approving the articles of association of the body in charge of keeping the single register of insurance, banking and finance intermediaries - Executive Order of 24 September 2014 amending the Executive Order of 20 December 2012 setting the amount of the annual registration dues for the single register of intermediaries mentioned in Article L of the Monetary and Financial Code - Executive Order of 30 September 2014 on the professional capacity of crowdfunding intermediaries - Executive Order of 30 September 2014 amending the Executive Order of 1 March 2012 on the single register - AMF Position (DOC ) and ACPR Position (2014-P-08) on non-guaranteed placement and crowdfunding - AMF Instruction on the process for review by the AMF of crowdfunding advisers registration requests and annual reporting (DOC ) - AMF Instruction on investor information to be provided by issuers and crowdfunding advisers or investment services providers in a crowdfunding offer (DOC ) 2 The list of PSP agents is updated once a year.
4 QUESTIONS & ANSWERS I OPERATE A LOANS- OR DONATIONS-BASED PLATFORM 1/ What is a crowdfunding intermediary (CI)? A CI is a platform that connects project initiators with financial backers through a website. Funding may be provided through loans with or without interest or through donations 3. 2/ What is the difference between a donations-based platform and a loans-based platform? If you specialise in loans, you must have CI status. If you specialise in donations, you may opt for CI status. If you do this, you must register with ORIAS, the single register of insurance, banking and finance intermediaries, and must also comply with the associated requirements, in accordance with the type of transactions conducted. If you are a donations specialist, you do not have to be registered. In this case, you do not have to comply with the requirements for CIs but you cannot use the name of crowdfunding intermediary. A platform that proposes both loans- and donations-based financing must be registered as a CI 4. 3/ What are the requirements for obtaining CI status? CIs must be legal entities. They have to be registered with ORIAS, which makes sure that they meet the criteria relating to good repute and professional skills. Individuals who run or manage a CI must meet the following criteria relating to their good repute and professional skills: - they must not be subject to one of the incapacities mentioned in Article L of the Monetary and Financial Code, or manage a person subject to a sanction provided for in points 3 and 7 of Article L and in Article L (I) of the same code; - they must show that they have a diploma, professional experience or training, as provided for in Article R of the Monetary and Financial Code 5. CIs must take out insurance against the financial consequences of professional liability 6. However, this obligation does not apply until 1 July Until that time, CIs have to tell their customers whether they are covered by professional liability insurance. 3 Art. L , Monetary and Financial Code. 4 Art. L , Monetary and Financial Code. 5 Art. L , Monetary and Financial Code.
5 4/ How can the senior managers of a CI demonstrate their professional skills? They can do this by: - Having a certificate that shows that they hold a Master s degree in banking, finance, economics, commerce, management, physical sciences, mathematics or banking or financial law and that is included in the national register of professional certifications; - Having professional experience: o two years in functions relating to the execution of crowdfunding or credit transactions, provision of payment services or financial engineering advisory services and acquired as a manager in the five years preceding registration in the single register; o three years in functions relating to the execution of crowdfunding or credit transactions, provision of payment services or financial engineering advisory services and acquired in the five years preceding registration in the single register. This experience may be demonstrated by providing one or more certificates of appointment; - Receiving at least 80 hours of banking- or finance-related professional training at an approved training centre, a credit institution, a finance company, a PI or an ISP. The content of the training is laid down by an executive order by the Minister for the Economy. The person responsible for the training should provide a signed certificate. 5/ How can a CI prove that it is authorised to operate in France? All CIs are registered with the single register for insurance, banking and finance intermediaries kept by ORIAS 7. By checking this register, anyone can make sure that a crowdfunding player is authorised to operate. The CI must display the ORIAS registration number on its website and show it in any correspondence and advertising. 6/ Is CI status recognised outside France? CI status is strictly domestic in scope and has not been harmonised across Europe. A CI wishing to offer services outside France must comply with the crowdfunding legislation in the country in question. 7/ Can a CI combine this status with other professional activities? A CI may not exercise any another activity. Exceptionally, however, CI status may be combined with that of: - credit institution, finance company, investment firm, EMI, PI or PSP agent. If the CI activity is an ancillary activity for one of these entities, it may also be combined with insurance intermediation; - CA, but only if the CI does not offer payment services 8. CI status cannot be combined with that of banking and payment services intermediary or financial investment adviser. 6 Art. L , Monetary and Financial Code. 7 Art. L , Monetary and Financial Code. 8 Art. L , Monetary and Financial Code.
6 8/ What information are CIs required to provide? CIs are required to provide supporters with information about: - identification, registration and, where applicable, authorisation if they offer payment services; - the general terms and conditions for using the platform; - remuneration procedures and charges; - eligibility requirements and criteria for selecting projects and project initiators; - all projects and project initiators; - the proposed financing, particularly the main features of the loan; - the risks incurred by lenders and failure rates for projects (already) presented by the platform; - the risks to the project initiator of excessive indebtedness and the consequences of a payment default; - the liability of each party (lenders, project initiator, CI) in the event of the project initiator s failure; - the duration of the loan; - the complaints process. The CI must also provide lenders with a tool to assess their financing capacity. 9/ What are the rules on direct marketing? Direct marketing means any unsolicited contact with a given individual or legal entity by any method whatsoever, and notably by post, or phone, aimed particularly at obtaining consent to carry out a credit transaction. CIs are not authorised to make use of or engage in direct marketing activities 9. 10/ What are the rules on advertising? A crowdfunding platform is allowed to promote its activities. If an advertisement gives an interest rate or quantitative information linked to a financing transaction, it must do so in a clear, precise and visible manner. 11/ What are the requirements for a CI to receive funds from lenders or donors? The CI s role is to put lenders or donors in touch with project initiators looking for financing. To be able to receive funds on behalf of third parties in crowdfunding transactions, CIs must be at least authorised as a PI or appointed as the agent of a PSP. In other words, a CI that is not at least authorised as a PI or registered as a PSP agent is not allowed to receive funds on behalf of third parties. However, this does not prevent it from receiving remuneration in its capacity as intermediary. 12/ What happens if the CI ceases to operate? The CI must always have a contract with a service provider that is authorised to complete all current transactions in run-off mode in the event that the platform ceases to operate / How does a CI obtain the crowdfunding label? Once it is registered in the ORIAS register, the CI can use the label. It must comply with the rules for use, which are in the process of being drafted. 9 Art. L , Monetary and Financial Code. 10 Art. L , Monetary and Financial Code.
7 I OPERATE A PLATFORM FOR THE SUBSCRIPTION OF SECURITIES 14/ Which types of status are authorised? An equity-based platform must be registered with the ORIAS register as a crowdfunding advisor ( conseiller en investissements participatifs ). It may also opt for the status of ISP providing financial investment advice, in which case it must be authorised by the ACPR. These platforms primarily provide a service to investors and must act in their best interests in all circumstances, from selecting offers to finalising investments (due diligence, risk warning, suitability test, provision of information required for decision-taking ). 15/ What is a staggered access website? With a staggered access website, a potential investor has to go through several stages before being allowed to take part in an offer. Stage one is used to ensure that the investor understands the nature of an investment in an entrepreneurial project and the risks entailed. Accordingly, the investor is not allowed to access detailed information about offers before reading and accepting the risks to which he or she is exposed. The site must reproduce exactly the following warning and questions: Please note that investing in unlisted companies entails specific risks, including: - risk of total or partial loss of the initial investment - illiquidity risk: resale of securities is not guaranteed and may be uncertain or even impossible - the return on investment depends on the success of the funded project Are you aware that you could lose your entire investment? YES NO Are you aware that it could be difficult to sell your securities? YES NO If the potential investor says NO to one of these questions, the platform must refuse access to detailed offer information. In Stage two, which takes place before subscription, the platform makes the potential investor complete a suitability test to ensure that the offer is consistent with his or her experience, knowledge, wealth and personal situation / Why opt for CA or ISP status? The choice of status must be made by those responsible for the crowdfunding platform based on their own constraints and development objectives and is determined with respect to the specific features of CA or ISP status. 11 See AMF Position on gathering KYC information (DOC ).
8 There are no capital requirements for obtaining CA status but these platforms may only offer vanilla bonds (fixed rate) and ordinary shares and cannot provide their services within the EEA. Also, CAs cannot hold customer funds or securities. To obtain the status of ISP providing investment advisory services, a platform must have capital of at least 50,000 if it does not receive customer funds or securities and 125,000 if it does. In the second case, ISPs are required to comply with prudential rules. In addition to allowing the platform to hold customer funds or securities, ISP status also enables it to offer all classes of securities and obtain a passport to supply investment services within the EEA. CAs and ISPs are subject to the rules of conduct and organisation set out in Book III of the AMF General Regulation. The requirements to prevent the activity of a crowdfunding platform from being reclassified as a non-guaranteed placement are the same irrespective of which status is chosen / What does CA status allow? CA status is specifically for securities-based crowdfunding. A CA is authorised to provide investors with investment advice relating to entrepreneurial projects. A CA may also provide companies with corporate finance advisory services and handle subscription forms. This status may be combined with that of crowdfunding intermediary (CI) 14 if payment services are not provided, as CA status does not permit to receive funds from the public. A CA may only receive funds corresponding to the remuneration of its business. 18/ What are the requirements for obtaining CA status? A CA is a legal entity that must be established in France. Individuals who are empowered to run or manage a CA must meet criteria relating to their age, fit and proper requirements. CAs must also take out professional liability insurance 15 and belong to a professional association authorised by the AMF (once the AMF has authorised one or more associations). The insurance should protect them against the financial consequences of professional liability. The minimum levels of coverage are set by Executive Order. The CA is registered with ORIAS, which checks the criteria relating to fit and proper management and age and ensures that the CA is insured and belongs to an association. Pending the authorisation of an association, the AMF 16 will assess CA applicants professional skills and ability to comply with the rules of conduct and organisation. Following this assessment, the AMF will tell ORIAS whether it believes that the requisite criteria are met. 13 See AMF/ACPR shared position giving the definition of unsecured investments. 14 Art. L , Monetary and Financial Code. 15 The requirement to take out insurance does not apply until 1 July Until that time, CAs must tell their customers whether the financial consequences of their professional liability are covered by an insurance contract. 16 The AMF s assessment will be based on an application in accordance with an AMF instruction. 19/ What procedure should a platform opting for ISP status follow?
9 A crowdfunding platform that opts for ISP status must file an application with the Autorité de Contrôle Prudentiel et de Résolution (ACPR) for authorisation to provide the service of investment advice (or other additional services where necessary). A platform seeking authorisation must meet the minimum capital requirement of 50,000 if it does not hold customer funds and 125,000 if it does. The list of ISPs is posted on the register of financial agents (REGAFI) kept by the ACPR. 20/ What types of platforms can be labelled? Platforms with ISP status 17 providing the service of investment advice and a staggered access website, and platforms with CA 18 status are the only ones that may be labelled 19. NB: some news sites function as platforms that merely connect investors with project initiators by posting online announcements. The platform itself is not involved in selecting projects and does not receive remuneration other than that earned for publishing the notice. Since they are not covered by the new regulatory framework related to crowdfunding, these sites cannot receive the label. 21/ What information must the platform provide to investors? The platform must provide Internet users with all the information needed to assess their investment 20, including: the issuer s business and project and specific risks connected with this; the issuer s most recent financial statements and forward-looking information; the level of investment in the project to which the issuer s senior managers are committed; the financial rights, voting rights and disclosure rights attached to the securities offered as well as those attached to other classes of securities not included in the offer and their beneficiaries; the provisions governing the terms (notably financial) and restrictions on the liquidity arrangements for the securities subscribed under a shareholders agreement or clauses in the articles of association; the conditions under which the investor may obtain copies of entries in the issuer s books evidencing ownership of investments (ex: copy of partner account authenticated by the legal representative of the company); the breakdown of fees borne by the investor at subscription and thereafter; the ability to request and receive a description of the services provided to the issuer and related fees. All this information must be provided in clear, non-technical language that can be understood by everyone Art. L , Monetary and Financial Code. 18 Art. L , Monetary and Financial Code. 19 A forthcoming regulation will stipulate the terms and conditions for using the label. 20 Art and of the AMF General Regulation. 21 The AMF has issued an instruction that provides a template for the information document to be provided to investors. If the investment is carried out through a holding company, the platform must ensure that the subscriber
10 receives information about the project supported and that the involvement of a holding company does not hinder the provision of the information listed above. 21/ What are the rules on advertising and direct marketing? Direct marketing means any unsolicited contact with a given individual or legal entity by any method whatsoever, and notably by post, or phone, aimed at obtaining consent to carry out a transaction in a financial instrument. Note that direct marketing is authorised only for securities that are the subject of an AMF-approved prospectus. A crowdfunding platform is allowed to promote the services that it provides by creating corporate advertising provided that this does not concern a specific offer. The platform is not authorised to specifically advertise the features of one investment offer that it is proposing where this offering is not the subject of a prospectus. However, it may communicate in a general manner about its business. 22/ Is direct contact at the initiative of a potential investor allowed? After identifying themselves and accepting the risks associated with unlisted investments, some potential investors may wish to enter into contact with the platform. Once the platform has checked that the potential investor who contacted it has taken note of the risks to which he or she is exposed (total or partial loss of the initial investment and risk of illiquidity of the investment) and expressly accepted these risks, the investor and the platform may enter into direct contact, by telephone for example. This contact does not exempt the platform from checking that the proposed investment is suited to the customer s profile prior to subscription (see question above). 23/ What are the requirements for a securities offering proposed through a platform to be exempt from the prospectus requirement? A new exemption has been created for platforms with CA or ISP status and a staggered access website (see question 14). In this case, a prospectus does not have to be published for a securities offering up to 1 million (irrespective of the amount of the issuer s share capital) calculated over a 12-month period 22. Other situations that do not constitute a public securities offering governed by Article L of the Monetary and Financial Code may apply subject to compliance by the issuer with the specific requirements described below. 22 Art. L , I bis and Art. D , Monetary and Financial Code Art , II of the AMF General Regulation.
11 24/ What are the requirements for a platform to be able to offer the securities of a simplified joint stock company ( société anonyme simplifiée or SAS )? Simplified joint stock companies cannot be the subject of a public securities offering 23. They may offer their securities only as part of a private placement 24. They can also obtain financing through the staggered access website of an ISP or CA up to maximum amount of 1,000,000 (see above) provided that they: - Amend their articles of incorporation to align them with the rules of French public limited companies in the following two areas 25 : o voting rights (proportionate to the amount of capital held subject only to the ability to create double voting rights or possible restrictions on the number of voting rights that may be held by a partner); and o general meetings (distribution of powers between ordinary and extraordinary general meetings, quorum and majority rules, procedures for convening partners, rights concerning advance provision of information). - Inform investors about the financial rights granted to partners and about any clauses covering temporary inalienability or exclusions. If the company that makes the offering is intended to hold and manage interests in another company otherwise known as a holding company 26 then amendments to the articles are also required for the simplified joint stock company in which it holds interests / What are the requirements for the subscription of securities through a holding company to fall outside the scope of the AIFM Directive? In the case of a securities offering, platforms may create a holding company to group the shareholders of a single target company together and simplify dealings with the project initiator and subsequently with the potential buyer. If the holding company does not meet the definition for an alternative investment fund set out in Article L of the Monetary and Financial Code and clarified by AMF Position DOC-2013 on the key concepts of the Alternative Investment Fund Managers Directive (AIFMD), then it does not fall under the AIFMD. A case-by-case assessment must be performed to determine whether a holding company falls within the scope of the AIFMD, particularly with regard to its investment policy and objective. If the holding company falls under the AIFMD, it must be managed by an authorised asset management company or be authorised itself as a self-managed vehicle. In both cases, it must comply with the obligations applicable to managers of Other AIFs. 23 Art of the Commercial Code. Note that senior managers of a simplified joint stock company that carry out a public offering may be subject to criminal penalties. Article L of the Commercial Code sets the fine at 18, Private placement is covered by point 2 of Article L (II), Monetary and Financial Code. 25 Art. L , I and R of the Commercial Code. 26 This term is not to be understood as defined by Article L , V, 7, Monetary and Financial Code. 27 Art. L , II of the Commercial Code.
12 26/ Can a platform offer the securities of companies that are registered abroad? A platform with CA or ISP status is allowed to offer the securities of foreign companies on its website provided that it complies with its obligation to act in the best interests of investors, notably in terms of project selection on the basis of pre-determined criteria posted on the website (i.e. due diligence), the quality and completeness of information on issuers and checks to make sure that the investment suits the investor s profile. However, offering the securities of companies that are registered abroad entails a risk of non-compliance with French regulations. This means it will be extremely hard for the platform to prove, given the many different forms of companies that exist, that it is complying with the legal and regulatory requirements to act in the best interests of investors, notably regarding the level of protection provided to them. Note that since CA status is national in scope, CAs may not offer their services in any European Union Member State other than France. 27/ What are the tax advantages of crowdfunding investments? There is no specific tax regime for crowdfunding through securities subscriptions. Please contact the tax authorities to find out about the rules applicable to investments in unlisted securities. 28/ What are the requirements for a foreign platform to operate in France? A foreign platform wishing to offer investments in France must have ISP or CA status: - either by holding a European passport, if it is authorised as an ISP in its home EEA State; - or by creating an ISP or CA subsidiary.
13 I HAVE A PROJECT AND I AM FUND-RAISING 29/ What type of funds am I allowed to raise 28? Project initiator Interestbearing loans Interest-free loans Donations Legal entity X X X X Individual pursuing professional goals X X X n/a Securities Individual seeking to finance initial or X X* X n/a ongoing training Other individual not pursuing professional goals No X* X n/a * provided lenders are not acting within a professional or commercial framework. A. I want to finance my project through loans 30/ What information can I check before proposing my project on a platform? You can check whether the platform is regulated (see question 5). Be sure to read the platform s general terms and conditions carefully. 31/ What framework applies to a loan made through a crowdfunding platform 29? If you want to finance a project that is proposed on a crowdfunding platform, you are acting as a borrower and enter into an agreement with each lender. This agreement, which is entered into remotely and which is not considered to be a consumer loan, is covered by special provisions and, specifically as regards its form and content, by Article R of the Monetary and Financial Code. The CI must provide you with a standard loan agreement. 32/ Who sets the interest rate? The interest rate is set in the agreement agreed with each lender. It is fixed for the duration of the loan and cannot exceed the usury rate. 33/ How much can I borrow through crowdfunding 30? The most that an individual project initiator can borrow is 1 million per project. The total amount of loans obtained through crowdfunding cannot exceed 1 million for a single project. 28 Art. L and L , Monetary and Financial Code. 29 Art. R to R , Monetary and Financial Code. 30 Art. D , Monetary and Financial Code.
14 34/ I want to raise funds through crowdfunding. Can I present my project on two or more platforms? Yes, provided that the amount borrowed through all platforms does not exceed 1 million for the project. To ensure transparency, the project initiator must inform the platform about any financing that is currently being repaid and presented by other platforms. 35/ I received loan financing through a CI but I cannot pay the money back. What are the consequences? The project initiator is directly and personally liable towards all lenders. Accordingly, before entering into a transaction you must make sure that it matches your ability to repay. The loan agreement must also provide clear and easily accessible information about the respective roles and responsibilities of the lender, the project initiator, the CI and any partners in the event of the project initiator s failure. 36/ I received financing through crowdfunding and have already repaid a portion of my loans. Can I ask for more financing? Yes. But if the new financing involves the initial project, total lending must not exceed 1 million. 37/ What information 31 must the CI provide me with 32? - Features of the loan in a summary document - CI remuneration and all charges - Standard agreement - The fixed rate not exceeding the usury rate - Warning about the risks associated with excessive debt - The right of rescission, where applicable B. I want to finance my project through donations 38/ How much can I raise to finance my project? There is no maximum amount for donations-based crowdfunding. 39/ Do I have to provide consideration to the donor in return? No, there is no such obligation. 31 Art. R et seq., Monetary and Financial Code. 32 General information provided by the CI on its website as well as in any correspondence and advertising materials.
15 C. I want to finance my project through securities 40/ What information can I check before proposing my project on a platform? You can check whether the platform is regulated (see question 13). Be sure to read the platform s general terms and conditions carefully. 41/ How much can I raise to finance my project? There is no maximum amount for securities-based crowdfunding. However, to benefit from the new exemption from publishing a prospectus, the offer must be made through the staggered access website of a CA or ISP (see question 14) and may not exceed 1 million. 42/ What are my disclosure obligations? If your securities offering is proposed on the website of a CA or ISP, you must provide various items of information to investors through the platform, including details about: - your business and project and the related risks, - rights attached to the securities offered as well as those attached to existing securities, - terms for selling the securities offered.
16 I WANT TO TAKE PART IN FINANCING A PROJECT A. I want to take part in financing a project through a loan 43/ Who can finance a project with a loan through a CI?... I can provide funds through a CI to finance a project by making... I am an individual lender not pursuing professional or commercial goals An interest-bearing loan An interest-free loan If the project involves: Financing for an individual s initial or ongoing training or If the project involves: Financing for an individual s initial or ongoing training or Requirements Any other purpose if the borrower is - an individual or a legal entity pursuing professional goals Any other purpose if the borrower is: - an individual not pursuing professional goals or - a non-profit organisation or recognised charitable trust making loans to establish, develop and take over companies or - an individual or a legal entity pursuing professional goals 44/ What information should I check before taking action? You can check whether the platform is regulated (see question 5). Be sure to read the platform s general terms and conditions carefully. The CI must provide the public with clear and understandable identification and contact details. Only legal entities may be IFPs Art. R and R , Monetary and Financial Code.
17 The site must inform the public about the terms for selecting projects and project initiators and about remuneration and charges. The CI must publish monthly statistics 34 about actual failure rates and an annual report giving details about its activity. 45/ What information am I required to have? The website must provide lenders with information about: - the project initiator, including the initiator s identity, experience and knowledge in connection with the project. - the project, with details about its nature, goal and economic prospects, including a business plan. - the features of the loan, including the applicable rate, amount, duration, procedures and repayment terms. The CI must provide a standard agreement and a sheet summarising the loan features. 46/ How much can I lend through a crowdfunding platform? As a lender, you can finance up to 1,000 per project if the financing is provided through an interestbearing loan or up to 4,000 in the case of an interest-free loan. The platform must provide you with a tool to assess your financing capacity based on your declared resources, annual costs and available savings. NB: a platform with CI status is not authorised to receive funds. To be able to receive funds directly through crowdfunding, CIs must show that they are at least authorised by the ACPR as a PI or that they have been appointed as the agent of a PSP. 47/ I want to provide financing through a loan. How is the interest rate set? The interest rate is set in the agreement signed with the project initiator. It must be fixed and cannot exceed the usury rate. 48/ I want to finance a project through a loan. Can I be certain that I will recoup my capital and earn interest? You are responsible for acquainting yourself with the information published by the CI about the project and the project initiator, especially if the initiator provides a guarantee or insurance. You must use this information to make your own assessment of the risk that you might not recoup some or all of your capital or earn the expected interest. 34 Art. R , Monetary and Financial Code.
18 49/ I have made a crowdfunding loan. Can I back out? Can I ask to be repaid early? The agreement signed between the lender and the project initiator, which must be set down in writing or in a durable medium, must say whether the parties have the right of rescission and, where applicable, stipulate its starting point, duration and exercise procedures. The agreement must also specify whether the initiator has the ability to make early repayment and where applicable, the terms for exercising this right. As a lender, you have no right to request early redemption of the loaned amounts, which is why it is important to assess your capacity to provide a crowdfunding loan before signing the agreement. Accordingly, the CI must provide you with a tool to assess your financing capacity based on your declared resources, annual costs and available savings. 50/ Is the interest that I receive taxable? There is no specific tax regime for crowdfunding. Please contact the tax authorities to find out about the rules applicable to interest. 51/ I participated in financing a project that has not reached its fund-raising target. How do I recover my funds? The procedures for repaying financing if the fund-raising target is not reached should be detailed in the terms and conditions for using the platform. 52/ What information 35 must the CI provide me with 36? - Description of the project initiator - Information about the project - Features of the loan in a summary document - CI remuneration and all charges - Standard agreement - Tools and information needed to assess the possible loan amount - The fixed rate not exceeding the usury rate - Warning about the risks associated with crowdfunding - Insurance or security backing the loan, where applicable - The right of rescission, where applicable 35 Art. R et seq., Monetary and Financial Code. 36 General information provided by the CI on its website as well as in any correspondence and advertising materials.
19 B. I want to take part in financing a project by making a donation 53/ How much can I give via a crowdfunding platform? If you are financing a project by making a donation, there is no maximum amount. NB: a platform with CI status is not authorised to receive funds 37. To be able to receive funds directly through crowdfunding, CIs must show that they are at least authorised by the ACPR as a PI or that they have been appointed as the agent of a payment institution. 54/ Are donations tax deductible? There is no specific tax regime for crowdfunding. Please contact the tax authorities to find out about the rules applicable to donations. 55/ What information 38 must the CI provide me with 39? - Description of the project initiator - Information about the project - CI remuneration and all charges - Standard agreement - The right of rescission, where applicable C. I want to take part in financing a project by subscribing securities 56/ How much can I invest? There is no limit to how much you can subscribe in response to a securities offering. However, the CA or ISP platform must ensure that the investment suits your level of knowledge, experience, financial position and funding goals and matches your risk appetite. If the investment is unsuitable, the CA or ISP must refuse your request. 57/ I want to finance a project by subscribing securities. What information does the platform have to provide me with? The platform must provide you with the following information on its website: - the initiator s business and project and specific risks connected with this; - the level of investment in the project to which the issuer s senior managers are committed; - the financial rights, voting rights and disclosure rights attached to the securities offered as well as those attached to other classes of securities not included in the offer and their beneficiaries; 37 Art. L , Monetary and Financial Code. 38 Art. R et seq., Monetary and Financial Code. 39 General information provided by the CI on its website as well as in any correspondence and advertising materials.
20 - the provisions specifying exit terms (notably financial) and restrictions on the liquidity of the securities subscribed under a shareholders agreement or clauses in the articles of association; - the breakdown of charges borne by the investor at subscription and thereafter; - the ability to request and receive a description of the services provided to the project initiator and related charges. All this information must be provided in clear, non-technical language that can be understood by everyone 40. If the investment is carried out through a holding company, the platform must ensure that the involvement of such a company does not hinder the provision of information about the project initiator. 58/ I want to finance a project by subscribing securities. What risks am I running? Investing in the securities of unlisted companies is inherently risky. A platform that enables projects to be financed through securities subscriptions must warn you about the risks of total or partial loss of the initial investment and the risk of illiquidity. Accordingly, before seeing detailed information about offers, you have to answer the following questions: Are you aware that you could lose your entire investment? YES NO Are you aware that it could be difficult to sell your securities? YES NO If you have further questions, you can get more information from the following websites: Assurance-Banque-Epargne Info Service: or call +33(0) , Monday to Friday from 8:00 am to 6:00 pm. ACPR: AMF: or call +33(0) , Monday to Friday from 9:00 am to 5:00 pm. 40 The AMF has issued an instruction that gives a template for the information document to be provided to investors.
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