ESMA Seeks Postponement and Requests Interpretation Clarifications.
Regulation (EU) 2020/1503 on European crowdfunding service providers for business will apply from 10 November 2021. The Regulation provides a set of harmonised EU rules for the provision of investment-based and lending-based crowdfunding services to facilitate business financing. The Regulation enables crowdfunding service platforms to apply for an EU passport so that that they can offer their services across the EU.
The European Securities and Markets Authority (ESMA) has expressed some concerns to the European Commission in relation to the application dates relating to this Regulation and in relation to some areas of interpretation.
In a letter to Mairead McGuiness, the European Commissioner for Financial Stability, Financial Services and the Capital Markets Union, ESMA requested the European Commission to defer the date of application of the Regulation. EMSA also requested the European Commission to clarify certain points of interpretation in the Regulation.
In this briefing, we set out the detail of ESMA’s requests.
The Regulation states that it will apply from 10 November 2021. ESMA is also required to submit most of its technical standards by 10 November 2021.
This overlap in dates has raised concerns that:
ESMA has therefore requested the European Commission to delay the application of the Regulation beyond 10 November 2021 so that the Regulation may apply in a more harmonised and orderly fashion.
ESMA also requested the European Commission to clarify certain points of interpretation in the Regulation.
We currently await the European Commission’s response. In the meantime, prospective Irish crowdfunding service providers should anticipate a 10 November 2021 application date, subject to the fact that this date may be delayed. We will keep you updated if this occurs.
If you have any questions concerning the letter or the Regulation, please contact a member from our Financial Services team.
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