Tuesday, December 22, 2015 12,09 PM / IOSCO/MR/53/2015
The International Organization of Securities Commissions (IOSCO) today published a Statement on regulation of crowdfunding.
IOSCO believes it is important for regulators and policy makers to balance the need for supporting economic growth and recovery with that of protecting investors when developing crowdfunding as a means to invest in small firms and start-ups.
Drawing on the findings from the Crowdfunding 2015 Survey Responses Report published today, IOSCO would like to raise awareness regarding some of the major risks investors face when investing in crowdfunding. It also would encourage regulators and policy makers to note the measures currently taken by regulators to address the risks inherent in crowdfunding.
Because crowdfunding is in its infancy, IOSCO has not yet proposed a common international approach to the oversight or supervision of crowdfunding. But the Statement encourages regulators to take into account possible cross border implications
IOSCO publishes 2015 Survey Responses Report on Crowdfunding
The International Organization of Securities Commissions (IOSCO) published today the Crowdfunding 2015 Survey Responses Report (Crowdfunding Report).
The Crowdfunding Report presents a summary of responses to a fact-finding survey of twenty-three IOSCO members. The Study had two goals – first, to enhance IOSCO’s understanding of developments in members’ current or proposed regulatory regimes for investment-based crowdfunding and second, to highlight emerging trends and issues in this area.
The jurisdictions surveyed reported a variety of approaches to regulate crowdfunding. Some jurisdictions apply their general securities regulatory framework, which may be sufficiently broad and flexible to address crowdfunding. Other jurisdictions have either introduced (or have proposed to introduce) specific regulatory crowdfunding regimes. The report highlights that most regulatory regimes for crowdfunding are in their early days.
The Crowdfunding Report also provides an overview of factors that regulators may find useful to the development of regulatory measures for addressing the inherent risks unique to crowdfunding activities. The goal is to achieve a balance between promoting crowdfunding and ensuring investor protection and market integrity. Some of the regulatory measures described in the Crowdfunding Report include:
The report also seeks to raise investors’ understanding of crowdfunding, e.g., that crowdfunding may differ from investing in more traditional securities products. In addition to take note of risks common in traditional finance such as conflicts of risks, data protection and fraud, it suggests that investors pay attention to certain key aspects, including: