Crowdfunding: Old wine in new bottles?
5 June 2014
Koen Panis (Loyens & Loeff)
Loyens & Loeff
• Legal and tax advice second to none
• Full-service practice
• Innovative and pragmatic
• Independent with...
3
Prospectus
Investment companies
FSMA
Permits
Unfair competition
Labour laws
IP
Copy right
IP infringements
PatentsUnfair...
Structuring
One size fits all?
4
Who are you?
Project
Access
to Bank
lending
Need of
Capital
ProductExpertiseSize
5
Platform
Project
Platform
Project
6
Project company BANK
SPV
P P
P
CVBA
A1 B1 B2
WATERFALL
C2
CROWD
C4C3 C6C5
SH1 SH2 SH3
Div Div
100%
10%
Profit participat...
EU – Recognition of the potential
27 March 2014: EU Commission notice
“Unleashing the potential of Crowdfunding in the Eur...
EU - “Way forward”
Promotion crowdfunding
• Awareness
- Flemish government: promotion (regulation = Federal level)
• Co-In...
Donation – Reward – Equity – Debt
• Anti-money laundering
- Anti-Money Laundering Directive
- E-commerce Directive
• Adver...
Belgium
• FSMA notice of 12 July 2012
10
FSMA
11
Source FSMA - 2012
12
FSMA
Source FSMA - 2012
Belgium
• FSMA notice of 12 July 2012
• No specific regulation for platforms (yet) – existing framework remains
• Programm...
Offer Instrument Prospectus Limit/Investor Onsales
restrictions
FSMA Advertising rules Distribution monopoly
Issuer Distri...
Amsterdam
Arnhem
Aruba
Brussel
Curaçao
Dubai
Genève
Hong Kong
Londen
Luxemburg
New York
Parijs
Rotterdam
Singapore
Tokio
Z...
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Crowdfunding & The Law: Old Wine in New Barrels

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What are the Legal and transactional implications of equity crowdfunding? Koen Panis presents the legal scenario in Belgium and EU.

By Koen Panis, Loyens & Loeff. Presented at Crowdsourcing Week Brussels 2014. More info: http://crowdsourcingweek.com/

Published in: Business, Economy & Finance
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Crowdfunding & The Law: Old Wine in New Barrels

  1. 1. Crowdfunding: Old wine in new bottles? 5 June 2014 Koen Panis (Loyens & Loeff)
  2. 2. Loyens & Loeff • Legal and tax advice second to none • Full-service practice • Innovative and pragmatic • Independent with an international scope • 900 lawyers, tax advisors and civil law notaries • 16 offices worldwide 2
  3. 3. 3 Prospectus Investment companies FSMA Permits Unfair competition Labour laws IP Copy right IP infringements PatentsUnfair terms Jurisdiction Corporate structure Litigation Tax Payment Services Products Services Financial instruments Financial instrumentsServicesProducts Donation based Equity based Debt based Reward based IP Tax Finance Corporate Labour
  4. 4. Structuring One size fits all? 4
  5. 5. Who are you? Project Access to Bank lending Need of Capital ProductExpertiseSize 5 Platform Project Platform Project
  6. 6. 6 Project company BANK SPV P P P CVBA A1 B1 B2 WATERFALL C2 CROWD C4C3 C6C5 SH1 SH2 SH3 Div Div 100% 10% Profit participating loan Distribution Account C5 100% Tracking stock Subordinated loan Class B shares P
  7. 7. EU – Recognition of the potential 27 March 2014: EU Commission notice “Unleashing the potential of Crowdfunding in the European Union” • Infrastructure: EUR 1,000,000,000 in projects • SME (funding gap) • Part of the process of desintermediation of banks - Government funds - Pension funds - Bond market - Crowdfunding 7
  8. 8. EU - “Way forward” Promotion crowdfunding • Awareness - Flemish government: promotion (regulation = Federal level) • Co-Investment • Loan guarantees by governments - State aid/competition rules Tax incentives European Crowdfunding Stakeholder Forum • Belgian association of crowdfunding (February 2014) - Industry sector knowledge - Lobby Study in 2014 New report in 2015 8
  9. 9. Donation – Reward – Equity – Debt • Anti-money laundering - Anti-Money Laundering Directive - E-commerce Directive • Advertising - Misleading and comparative advertising • Consumer protection - Directive on unfair commercial practices - Unfair Contract Terms Directive • Intellectual property protection - (EU) Patent • EU state aid and competition rules 9 EU - “key challenge = lack of transparency on the applicable rules” Donation – Reward – Equity – Debt • Prospectus Directive • Payment Services Directive • MIFID • CRD IV • AIFM • Consumer Credit • Distance Marketing of Financial Services • Regulations on Capital Requirements • European Venture Capital • European Social Entrepreneurship Funds National laws
  10. 10. Belgium • FSMA notice of 12 July 2012 10
  11. 11. FSMA 11 Source FSMA - 2012
  12. 12. 12 FSMA Source FSMA - 2012
  13. 13. Belgium • FSMA notice of 12 July 2012 • No specific regulation for platforms (yet) – existing framework remains • Programmawet: New Section to Prospectus Law of 16 June 2006 - Limit of EUR 1000 per investor/EUR 300,000 per offer 13
  14. 14. Offer Instrument Prospectus Limit/Investor Onsales restrictions FSMA Advertising rules Distribution monopoly Issuer Distributor > 100.000 All investments instruments Yes No Yes Approval Yes No Yes < 150 persons All investments instruments No No Yes No/review No No No < EUR 100.000 All investment instruments No No No No/review No No No < EUR 5,000,000 Shares in Eligible CVBA No EUR 5000 including continuing offers No, but… Review Yes Limits of EUR 5,000,000 EUR 5,000 to be mentioned No Yes < EUR 300.000 Only • Securities • Rest category • No derivatives • … ! Interpretation ! No EUR 1000 including continuing offers No, but… Review Yes Limits EUR 300,000 EUR 1000 to be mentioned No No < EUR 5,000,000 Securities in employee benefit plans No No No Review Yes Limit EUR 5,000,000 to be mentioned No Yes 14 Prospectuslaw - New “crowdfunding” exceptions
  15. 15. Amsterdam Arnhem Aruba Brussel Curaçao Dubai Genève Hong Kong Londen Luxemburg New York Parijs Rotterdam Singapore Tokio Zürich www.loyensloeff.com Questions? Shoot now or see me at the bar Contact Koen Panis koen.panis@loyensloeff.c +32 2 773 23 90 +32 497 53 38 36
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