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Dear CommissionerMcGuinness,
In light of the upcoming date ofapplication of Regulation (EU) 1503/2020of the European Parliament and of the Councilon the European crowdfunding service providers for business (ECSPR)1, I would like to share withthe European Commission some important interpretation issues that emerged from ESMA’s interaction with nationalcompetent authorities and market participants.
I would also like to mention the concern, shared with national competent authorities,regarding potential issues in relation to the respective dates of application of the ECSPR and of the technical standards to be adopted by the European Commission pursuant to the ECSPR.
ESMA is of the view that it would be highly beneficial to market participants and national competent authorities alike that the European Commission clarify the following uncertainties identified in the interpretation of the ECSPR.Such clarificationswouldalso facilitate an orderly application of the ECSPR from 10 November 2021.Please note that, if needed,ESMA staff could be in touch with your services in the coming months to suggest additional issues deservingclarification.
These interpretation issues of the ECSPR are summarised in the Annex and cover:
-the transitional periodset out in Article 48 of the ECSPRwith respect to crowdfunding services provided in accordance with national law;
-the meaning of ‘business activity’ pursuant to point (l) of Article 2(1) of the ECSPR;
-the legal status of the provision of ‘individual portfolio management of loans’in lightof points (a) and (c) of Article 2(1) of the ECSPR;
-the scope of the prohibition to prevent prospective non-sophisticated or non-sophisticated investors from investing in crowdfunding projects pursuantto the second subparagraph of Article 21(6)ofthe ECSPR;
-the scope of the prohibition made to crowdfunding service providers to pay or accept any remuneration, discount or non-monetary benefit for directinginvestors’ orders to a particular crowdfunding offer made on their crowdfunding platform or to a particular crowdfunding offer made on a third-party crowdfunding platform;
-the respective responsibilities of crowdfunding service providers and project ownersregarding the content of the key investment information sheet. Issue in relation to the respectivedate of application of the ECSPR and the expected date of application of delegated and implementing acts to be adopted by the European Commission pursuant to the ECSPR Pursuant to its Article 51, the ECSPR will apply on 10 November 2021.
ESMA is due to submit the majority of its technical standards by the same date. Notwithstanding the significant number of mandates,ESMA endeavours to submit its technical standards even prior to this date, including some or all of the draft technical standards that ESMA is due to submit by May 2022.
It is however already unavoidable that the full endorsement process as regulated underArticles10 to 14 of Regulation (EU) 1095/2010 will not be concluded before 10 November 2021.
As a consequence, the ECSPR will begin to apply significantly before the application of the technical standards the European Commission should adopt pursuant to the ECSPR. This situation triggers concerns in terms of harmonisation and level playing field among Member States during the interim period between the date of application of the ECSPR and the date o fapplication of the technical standards.
It is also likely to make the authorisation process more complex both for competent authorities and applicants. Slightly delaying the date ofapplication of the ECSPR would enable a more orderly and harmonised application of this new and important piece of legislation.