Tony Katz - партнер Orrick о том, как устроен краудфандинг в Англии и Европе. Доклад для форума Открытые инновации

1. Crowdfunding: its growth and challenges
The UK and Europe
31 October 2013
Tony Katz, Partner
Orrick, Herrington & Sutcliffe (Europe) LLP

2. Agenda
What is crowdfunding?
The current regulatory regime in the UK?
The future of crowdfunding across Europe

3. What is crowdfunding?
• An alternative means of raising capital
• A way of connecting those who need financing with those
in a position to give, lend or invest money
• Usually achieved via a crowdfunding platform
• Often small amounts by a large number of investors

4. Types of crowdfunding - Donation

5. Types of crowdfunding - Debt

6. Types of crowdfunding - Equity

7. How does it work?
Introduction to the company
Pitch
Target funding:
All or nothing model
Keep it all model

8. Crowdfunding platforms
• Assist in the presentation and design of the pitch
• Put projects in touch with funding
• Collect funds
• Conduct due diligence
• Screen investors
• Take a cut

9. What are the investor risks in equity schemes?
The FCA notes that:
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Most start ups fail and investors might lose capital entirely
Highly illiquid investment
No short term gain
Dividends unlikely
Risk of dilution
Risk of fraud
No FCA authorisation means no access to the Financial Ombudsman
Service or the Financial Services Compensation Scheme

10. When would a platform need regulation in the UK?
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Financial Services & Markets Act 2000 (FSMA) (as amended) implications
» Regulated activities examples: arranging deals in investments, safeguarding and
administering investments and activities in relation to collective investment
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Financial promotions
» Unless exempt, marking must be approved by an authorised firm
» Liability for firm approving financial promotion
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Offers to the public
» Prohibition for private companies offering securities to the public unless to platform
members
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Prospectus requirements
» Exemptions normally apply

11. What’s the tax position for investors?
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SEIS
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Seed Enterprise Investment Scheme provides tax reliefs to individual investors when
they purchase new shares in early-stage companies
Significant tax relief for investment in start-ups
Income tax relief; CGT exemption and CGT reinvestment relief
Various conditions must be met by the investor and company
EIS
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Encourages equity investment in new and small companies
Unlimited deferral relief from CGT where gains are reinvested in newly issued eligible
shares
Taxpayers are entitled to certain relief from income tax on investment in EIS
shares, provided that the shares are held for at least 3 years
A company’s shares will be eligible if it is an unquoted trading company and meets
various other conditions

12. The future of crowdfunding - the UK
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On 1 April 2014 FCA are taking over the regulation of the consumer credit market in the UK
FCA current approach: current rules not designed with crowdfunding business models in
mind. Imposes restrictions on crowdfunding platforms applying for authorisation on a caseby-case basis, tending to limit available clients to high net worth and/or sophisticated
investors.
FCA consultation on 24 October 2013 aims to:
» Make the market more accessible to retail clients to help foster competition and to
facilitate access to alternative investment options
» Continue to ensure that only investors who can understand and bear the risks
participate
FCA proposals
» Restrict the direct offer financial promotion of unlisted shares or debt securities by firms
to one or more particular types of client (self-certified sophisticated investors, high net
worth individuals, retail clients who receive regulated investment advice from an
authorised person, retail clients who limit the amount invested in unlisted securities to no
more 10% of their net investible portfolio)
» Where advice is not provided the FCA will expect firms to apply an appropriate test
before selling them promotions for unlisted securities – to ensure that only those clients
who have the knowledge or experience to understand the risks can invest

13. Crowdfunding across Europe
Germany
France
Italy
Anyone intending to provide financial services requires a
written licence from BaFin
Provision of investment services restricted to firms
authorised by ACP
Anyone intending to provide investment services
commercially or on a scale that requires a commercially
organised business undertaking requires a written licence
from CONSOB and./or Bank of Italy
Statutory exceptions to licensing are available – these
include if the platform only operates investment broking
and contract broking (with certain requirements) or if
the platform only offers silent partnerships or
participation rights and the and the platform does not
accept funds
Hurdles to become authorised investment service provider
for crowdfunding platforms include requirement of equity
platforms to have €730,000 minimum capital in order to be
authorised , stringent anti money-laundering and antiterrorism rules
The operator of a crowdfunding platform could be subject to
further regulations, in particular Italian Money Laundering
Law, Data Privacy Law and Consumer credit regulation.
Prospectus requirements and exemptions as per European
legislation (Prospectus Directive)
Prospectus requirements and exemptions as per European
legislation (Prospectus Directive)
Prospectus requirements and exemptions as per European
legislation (Prospectus Directive)
As a rule, capital investments may not be publicly offered for
sale in Germany without publication of a prospectus with
BaFin approval
Additional prospectus requirements: approval by ACP if
more than 99 investors investing and a maximum of 149
investors can ask for information on an investment
The prospectus requirement does not apply to the offering of
securities or investment products with a value of €5M or less
within a period of 12 months
Platforms accepting money directly from investors require
authorisation under Payment Services Supervision Act
Steps towards more specific regulation (May 2013) by the
ACP when they published guidelines for PMs aiming to
inform platforms and PMs about existing rules based on the
form of crowdfunding (rewards, loans and equity)
July 2013: further urgent measures for the growth of the
country – Italy one of only countries to specifically
legislative on crowdfunding – an opportunity for
platforms to operate more easily in Italy
September 2013: new status for securities crowdfunding
organisations – Crowdfunding Investment Service
Provider – special status with limited regulatory
requirements – suitable for limited size platforms only
Platforms raising capital for innovative start-ups: active
companies less than 48 months old whose stock is
predominately held by individuals and with a total annual
output less than €5m
September 2013: consultation launched to define
regulation for securities crowdfunding; now nearing the
end of a 6 week public consultation – change in
regulation is likely forthcoming
Further requirements: R&D expenses make up a large
chunk of the company’s costs or 1/3 of staff hold a
PhD/studying for PhD or company has been granted patent
Platforms must be run by investment companies and
are then permitted to carry out a public offering of
financial instruments innovative start-ups up to €5m
outside of existing regulation

14. What does the EU think?
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EU Commission consultation to explore the added value of
potential EU action
Compatible with aims and objectives of the Commission
Purpose of consultation:
• Explore how EU action could promote crowdfunding in Europe
• Explore possible soft law measures
Deadline for response 20 December 2013

15. Conclusion
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Questions?
» Tony Katz
» Partner
» email: tkatz@orrick.com
» Telephone: +44 207 8624822
» Orrick, Herrington & Sutcliffe (Europe) LLP
» 107 Cheapside
» London EC2V 6DN
» England