The Minister for Finance and Public Accounts and the Minister for the Economy, Production Recovery and the Digital Sector have presented an ordinance in relation to crowdfunding. This ordinance creates a secure legal framework for this type of finance, which puts France at the forefront in this area.
Crowdfunding is a method of finance that bypasses traditional channels, in particular financial institutions, and relies on a large number of people to finance a project. This ordinance creates a secure legal framework for this type of finance, which puts France at the forefront in this area, where finance is obtained by subscribing equity or obtaining loans. This system will ensure the confidence among investors and lenders that is necessary in order to develop crowdfunding.
To develop crowdfunding in the form of crowd equity, the ordinance provides for a new role of participatory investment advisor. Platforms could offer financial securities without the obligation to prepare a prospectus. This new method of finance is open to simplified joint-stock companies, which will allow young companies to benefit from this form of finance.
The ordinance also allows individuals to secure direct finance for their businesses by providing them with loans, bypassing the monopoly of the banks. Individuals in search of finance for a project will present this project on an approved online lending platform, which will have the status of a "crowdfunding intermediary". This status will indicate a high level of protection for the interests of the lender and for the borrower. It will also be able to be used by platforms for donations that wish to have it. The new, lighter prudential regime for the establishment of payments will also see a framework of constraints out in place that is appropriate for the level of activity of platforms that receive funds.
Excerpts from the Council of Ministers