The regulation of equity crowdfunding platforms has changed with the arrival of a new European licence, the PSFP (Equity Crowdfunding Service Provider). Mandatory since 10 November 2023, this new status has introduced a number of new features, particularly in terms of security. It is now recommended that equity crowdfunding platforms equip themselves with an anti-fraud solution. What are the main changes and what impact will they have on platforms? Here are the key points to remember in the rest of this article.
Participative Financing Service Provider (PSFP): what is it?
Crowdfunding was launched in 2008 and has grown considerably worldwide. France was a pioneer in the regulation of these funds, establishing two specific categories for crowdfunding platforms:
- Participative investment advisor (CIP) statusThis is the name given to platforms that allow investors to subscribe to financial securities such as shares or bonds. This is often the case in the real estate, renewable energy and SME financing sectors.
- Participative finance intermediary (IFP) statusdedicated to platforms that facilitate participative lending or the collection of donations.
For standardise regulations across Europe, to protect users and for encouraging growth crowdfunding platforms, the European Union introduced a common regulatory framework in 2020, the status of PSFP (Participative Financing Services Provider). This new title replaces the CIP and IFP approvals.
This common status has become compulsory from 10 November 2023 for all equity crowdfunding platforms.
👀 Good to know :
In France, it's the Autorité des marchés financiers (AMF) which is responsible for issuing this accreditation
What changes does PSFP certification bring?
The new PSFP status brings a host of changes for crowdfunding platforms. We take a look at the changes with you!
Greater supervision of future investors
Crowdfunding platforms must now put in place appropriate reinforced systems for the treatment of customer complaints, L'identifying potential conflicts of interest and the supervision of service providers external.
They must also be vigilant when choosing project promoters. They must select them carefully by analyst their projects and by evaluating.
Tighter control over investors
As of 10 November 2023, a better understanding of investor profiles is required. Indeed, a greater control is imposed in the fight against money laundering and the financing of terrorism (LCB-FT).
To find out more about LCB-FT regulations : Combating money laundering and terrorist financing: towards the adoption of new rules
The obligation to obtain a key investor information sheet (FICI)
There Key Investor Information Sheet (FICI) is now mandatory for all projects. This form, containing a maximum of 5 pages, groups together all the essential information about an investor's project.
Its aim? To make it easier to compare projects on the various crowdfunding platforms, and to gain a better understanding of the profile of each investor.
Tougher organisational requirements
Platforms must now comply with stricter internal organisational constraints. They must have regulatory capital of at least €25,000.
In addition, platforms can collect maximum of €5 million per project over one year. (compared with 8 million previously)
The aim of this new practice is to better select project sponsors.
💡Did you know?
Platforms must comply with new constraints, for the benefit of investors. Investors are now classified into two categories: the sophisticated investors the unsophisticated investorsHow does it work? When you register, a customer questionnaire must be completed to estimate the income and financial experience of each investor. Uninformed investors are then asked to 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 enables investors to be better protected.
Why use an anti-fraud solution when you have the PSFP?
The adoption of an anti-fraud solution as part of PSFP status is crucial. Here are the reasons why.
Monitoring suspicious behaviour
With increased monitoring of transactions for money laundering and terrorist financing, an anti-fraud solution makes it possible to set up automatic checks. The purpose of these controls is toidentify suspicious behaviourincluding unusual fund transfers.
Understanding investor profiles
PSFP status requires in-depth knowledge of investor profiles, including their financial experience and their risk tolerance. An anti-fraud solution can analyse data in real time to check the consistency of the information provided by investors and alert the platform to any anomalies.
This technique helps not only to protect investors, but also to prevent internal or external fraud that could compromise the platforms.
Enhancing your reputation
Crowdfunding platforms that comply with PSFP regulatory requirements with an anti-fraud solution enhance 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 key factor in the success of crowdfunding. 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 forged documents: you drag the documents you receive into our platform and analyse their authenticity in just a few clicks. To find out more, don't hesitate to request a demonstration of our solution.
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