New status for the France crowdfunding software platforms offering equity and certain debt securities (CIP)
– See more at: http://www.osborneclarke.com/connected-insights/publications/first-steps-towards-crowdfunding-regulation-france/#sthash.oUYgv3Wp.dpufThe new regulation creates the status of conseil en investissement participatif (crowdfunding investment advisors – CIP). CIPs shall be those which provide investment services in equity securities and certain debt securities on an internet website complying with specifications to be set forth by the AMF General Regulations.
They may also provide a limited number of ancillary services (e.g. handling subscription applications). They cannot receive funds from investors (except for their remuneration) and are not authorized to receive securities from issuing companies. CIPs cannot have other activities except those of IFP (see below).
CIPs shall be legal entities established in France. No approval by supervisory authorities (banking supervisory authority – ACPR or AMF) is required.
CIPs shall (i) be registered at the ORIAS register for intermediaries in banking operations and payment services, (ii) present certain moral guarantees, (iii) be members of an accredited association which controls their activities (if the association is not accredited specific control procedures are implemented) in compliance with forthcoming AMF regulation and (iv) subscribe specific insurance policies (minimum guaranteed amount to be set by a decree and mandatory as from 1st July 2016). They shall, also (v) comply with the good conduct rules set forth in the Ordinance and (vi) ensure that their clients’ interests are protected and that they receive the adequate level of information to appreciate the risks connected to their investment.
CIPs will be subject to anti-money laundering and anti-terrorists regulations and placed under the supervision and disciplinary power of the AMF.
Investment services providers (PSI) authorized by supervisory authorities to provide investment advice (e.g. bank, insurance companies) will not have to register as CIP to provide investment services in equity securities and certain debt securities on an internet website.
Derogation to public offering rules
The new legal framework provides for a major exception to public offering rules.
Société par actions simplifiée or “SAS” which is the more flexible type of limited liability company by shares that may be set up in France (often used for venture capital) is no longer prohibited from making public offering where proposed by a CIP or an investment services professional (PSI) on their websites, within financial limits to be further specified. A number of conditions are set out in the Ordinance on the content of such SAS articles of association (in particular for voting rights and shareholders’ meetings).
The offering of equity and certain debt securities by a CIP (or authorized investment services professional – PSI) on their websites is not a public offering (subject to a prospectus), if the offering amount is lower than an amount to be set out by decree (based on current discussions, probably €1m) over a 12-month period. Information to be provided, on the website, to the investors is to be further specified.
Review the current France Crowdfunding software discussion:
Here are just a few features for France crowdfunding software included in the CrowdForce platform software:
• Currency options include $, £, € with more custom options available
• Localization and language packs available
• Complete and simple document signing and management
• Easy offline payments, custom payment solutions available
• Plug in your local escrow account
• Plug in your broker services for accredited investments
Get a demo Pricing Learn More