European Parliament Recommends Crowdfunding Platforms to Disclose Default Rates

In an attempt to protect investors whilst, giving the European crowdfunding industry a common set of rules and standards to smoothly and safely operate across-borders, MEPs recommend platforms to disclose default rates of projects offered on their platforms on a yearly basis.

The purpose of the move is providing investors with clear information about financial risks and charges related to their investment, including insolvency risks and project selection criteria.

Moreover, they should also be given a key investment information sheet drawn up by the project owner for each crowdfunding offer, a press release points out.

“Crowdfunding is a growing phenomenon,” commentedCaroline Nagtegaal MEP, “which is broadening access to finance for Europe’s start-ups and small companies whilst allowing individuals to invest in the market. We want to promote an online EU marketplace so this innovative sector can thrive.”

Although not included in today’s reports by Caroline Nagtegaal and Ashley Fox, MEPs have asked the European Commission to come forward with new legislative proposals on the regulation of Initial Coin Offerings.

“Approval today means that negotiations with European Council and Commission can begin after the European elections in May,” explains Ashley Fox MEP, “with the aim of the legislative process being completed by the end of the year.”

Download the reports here.

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