On 26th June 2014 the Finnish Financial Supervisory Agency (FIN-FSA) published its new guidelines on equity crowdfunding. Under the new guidelines, equity crowdfunding platforms are engaged in the “reception and transmission of orders in relation to one or more financial instruments” as described in the Financial Services Act. Depending on the scope of their services, the may also provide other regulated services, such as investment advice and duties typically undertaken by arranger banks.
FIN-FSA’s written guidelines were somewhat expected as regulators in Europe are taking a closer look at equity crowdfunding. Italy, Spain, France and the UK, for example, have implemented guidelines on equity crowdfunding, ranging from strict regulation to guidance on transparency and customer protection aspects. However FIN-FSA´s surprise move simply classifies all equity crowdfunding platforms as financial service providers, while not providing any new guidance on prospectus requirements, disclosure requirements or other investor protection issues. This makes the current Finnish regulation on equity crowdfunding platforms among the most restrictive in all of Europe.
Until now, the Finnish equity crowdfunding platforms have been operating on the widely accepted consensus that they act as a “media”, and thus no regulated financial services are provided. The new FIN-FSA guidelines require these operators to apply for a permit for acting as an investment firm, or terminate such operations as currently conducted. The FIN-FSA move raises fears that this also limits financing and investment opportunities available to Finnish entrepreneurs and investors.
Attorneys at law Borenius offers a comprehensive array of services for companies and investors related to financing rounds and well as other corporate law services. Our lawyers are also leading experts in Finland in the field of regulatory and other legal matters related to reward-based and equity crowdfunding.