The regulation of crowdfunding platforms has changed with the arrival of a new European agreement, the PSFP (Crowdfunding Service Provider). Having become mandatory since November 10, 2023, this new status has introduced several new features, particularly in terms of security. It is now recommended that crowdfunding platforms equip themselves with an anti-fraud solution. What are the main changes and their impacts for platforms? Here are the essentials to remember in the rest of this article.
Crowdfunding was launched in 2008 and has grown considerably on a global scale. France was a pioneer in regulating these funds by establishing two specific categories for crowdfunding platforms:
For standardize regulations across Europe, for protect users And for encourage growth of crowdfunding platforms, in 2020 the European Union introduced a common regulatory framework, the status of PSFP (Crowdfunding Service Provider). This new title replaces CIP and IFP approvals.
This common status has become mandatory since November 10, 2023 for all crowdfunding platforms.
👀 Good to know:
In France, it is the Autorité des Marches Financiers (AMF) Who is responsible for issuing this certification
The new PSFP status brings multiple changes for crowdfunding platforms. We take stock with you!
Crowdfunding platforms must now set up reinforced devices for the treatment of customer complaints, theidentification of potential conflicts of interest And the supervision of service providers external.
They must also be vigilant when choosing project leaders. They must select them carefully by analysing their projects And in them evaluating.
Since November 10, 2023, a better understanding of investor profiles has been required. Indeed, a increased control is imposed in the fight against money laundering and the financing of terrorism (LCB-FT).
To find out more about AML/CFT regulations: Combating money laundering and terrorist financing: towards the adoption of new rules
La Key Investor Information Sheet (FICI) is now mandatory for all projects. This sheet, containing a maximum of 5 pages, includes all the essential information about an investor's project.
Its purpose? Facilitate the comparison between projects on the various crowdfunding platforms and thus better know the profile of each investor.
Platforms must now respect more stringent internal organizational constraints. They must have regulatory capital of at least €25,000.
In addition, platforms can collect at maximum 5 million euros per project in one year. (compared to 8 million previously)
This new practice aims to better select project leaders.
💡 Did you know?
Platforms must respect new constraints, for the benefit of investors. Indeed, investors are now classified into two categories: savvy investors The uninformed investorsHow does that happen? At registration, a customer questionnaire must be completed to estimate the income and financial experience of each investor. Unsophisticated investors should then use a simulator to assess their ability to bear losses. An alert is then triggered if the investment exceeds €1,000 or 5% of net assets. This new method allows investors to be better protected.
The adoption of an anti-fraud solution under the PSFP status is crucial. We give you the reasons below.
With the increased surveillance of transactions for money laundering and terrorist financing, an anti-fraud solution makes it possible to set up automatic controls. The advantage of these controls is toidentify suspicious behavior, in particular unusual money transfers.
PSFP status requires a thorough knowledge of investor profiles, including their financial experience and their risk tolerance. An anti-fraud solution can analyze data in real time to check the consistency of the information provided by investors and alert the platform in case of anomaly.
This technique not only helps protect investors, but also helps prevent internal or external fraud that could compromise platforms.
Crowdfunding platforms that comply with PSFP regulatory requirements with an anti-fraud solution strengthen their reputation and attract more investors. In a sector where trust is paramount, being able to demonstrate that all the necessary measures are in place to secure transactions and protect funds is a major competitive advantage.
To find out more about the benefits of an anti-fraud plan: The four advantages of deploying an anti-fraud plan for a fintech
At Finovox, we offer you an easy-to-use solution for detecting false documents: you drag the documents you receive into our platform and analyze their authenticity in a few clicks. To find out more, do not hesitate to ask for a demonstration of our solution.
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