The Minister for finance, Mr Michael Noonan T.D. launches crowdfunding public consultation
Regulation of financial forms of crowdfunding
The IFS 2020 2017 Action Plan commits the Government to conducting a public consultation on the potential regulation of crowdfunding, having regard to international best practice and in the context of the EU Commission Action Plan on Building a Capital Markets Union.
Crowdfunding can be a valuable source of funding for SMEs, either as a complement, or as an alternative, to traditional bank finance. Crowdfunding is a means by which finance can be raised from a large number of individuals or institutional investors through online platforms and can be used to fund businesses, projects or personal loans.
Crowdfunding is technology based, innovative and continually evolving market-based finance that could help stimulate funding to small and medium-sized enterprises (SMEs) as well as personal lending.
Crowdfunding also provides consumers and small investors with access to investment opportunities that offer a higher rate of return, at a higher risk, than is generally available from traditional credit institutions.
The consultation is seeking views on crowdfunding in order to understand how best to facilitate the development of crowdfunding in Ireland for the benefit of the economy while also ensuring adequate protection for small investors and consumers.
The objective of the consultation is to seek the views of interested parties regarding whether or not a regulatory regime would be appropriate for the crowdfunding sector, particularly given the potential requirements and costs it could impose on the sector.
The Minister for finance, Mr Michael Noonan T.D. has today launched the crowdfunding public consultation, which will run for a period of six weeks, to 2 June 2017. Speaking about the consultation, Minister Noonan said:
“Ensuring that the development of this exciting and innovative form of finance is facilitated for the benefit of the economy, while also ensuring adequate protection for consumers providing funds through crowdfunding platforms is of critical importance.”
“This consultation will inform our thinking and will assist in the consideration of whether a regulatory regime would be appropriate for crowdfunding, given that there is no dedicated harmonised regulation for crowdfunding and the existing European financial services legislation was not designed with crowdfunding in mind.”
Notes for Editors
Crowdfunding is not currently a regulated activity in Ireland and, in June 2014, the Central Bank of Ireland issued an information notice that alerts consumers to this fact and highlights specific risks that potential investors should be aware of before using crowdfunding platforms.
The Consultation document can be accessed here http://www.finance.gov.ie/what-we-do/banking-financial-services/consultations/regulation-crowdfunding-consultation-paper.
The closing date for submissions is 2 June 2017. You can respond by email to: firstname.lastname@example.org. Please ensure that Regulation of Crowdfunding Consultation is stated in the subject line.
Alternatively, you may respond by post to:
Public Consultation on the Regulation of Crowdfunding
SME Credit & Lending Section
Department of Finance
Upper Merrion Street
Dublin 2, D02 R583