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INVESDOR INSIGHTS | 9.2.2023
The ECSP licence* now enables Invesdor investors to invest in a wide range of projects throughout Finland, Germany, Austria, the Netherlands, and Belgium.
Andreas Knopf, Head of Legal at Invesdor and an experienced lawyer, was involved in the preparations for the ECSP licence from the beginning. As an in-house expert, he is familiar with the European Crowdfunding Regulation background.
*The licence has been granted to Invesdor GmbH in Austria, and for the time being unlimited investment is possible through its funding rounds.
Andreas: The European Crowdfunding Service Provider Regulation (ECSP) simplifies European-level crowdfunding investments. Before the introduction of this regulation, each EU country regulated crowdfunding independently. This means that the supervisory authorities of the respective countries, such as BaFin (Federal Financial Supervisory Authority) in Germany or the FMA (Financial Market Authority) in Austria, were responsible for such matters.
With the EU regulation, uniform brokerage requirements and respective regulations exist. On the one hand, this simplifies the investment processes for investors and crowdfunded companies; on the other hand, issuers benefit from expanding the market.
Even before we received the ECSP licence, we tried to make the investment flow as straightforward as possible. Accordingly, Invesdor investors will probably not notice a massive difference in the processes.
In terms of transparency and security, we have implemented some optimisation measures for the benefit of the investors. For example, the ECSP regulation stipulates that a key investment information sheet exists for every financial product. This means that those interested in investing can now see at a glance who their contractual partner is and what the key facts of the financial product are. It also contains details about the respective investment and provides information about any risks.
The uniform structure of the key investment information sheet enables European investors to compare different financial products from different crowdfunding platforms. This makes it easy for them to determine which financial instrument might interest them.
Investors have additional security by being asked about their knowledge of financial investments. Anyone who has insufficient experience with a preferred financial product will be informed by the respective platform that this product is unsuitable for them.
Due to Invesdor's history and the networking in Finland, Germany and Austria, we had already expanded our business outside the respective home markets. At that time, this cross-border business was still paved with many hurdles. So we already had a relatively large amount of experience with transnational issues.
In addition, we started to deal with the topic early, i.e. after we learned that there would be a European crowdfunding regulation in the future. Therefore, we initiated all the necessary processes for acquiring licences from the beginning. This head start helped us become among the first in Europe and the first crowdfunding platform in the DACH region with the ECSP licence.
Since the ECSP licence is a regulation, all crowdinvesting companies must have this licence by the end of the extended deadline in the fall of 2023. Companies that do not have the ECSP licence by then will no longer be allowed to broker securities or loans under 5 million via their platform. In this respect, the market will probably consolidate at some point, which is an advantage for Invesdor.
You can easily invest in crowdfunding projects throughout the EU without any hidden risks.
Standardised investment processes and transparent communication
Thanks to the key investment information sheet, Invesdor investors benefit from standardised investment processes and transparent communication.
Investment opportunities comparable in your own language
A standardised key investor information sheet is produced for each investment product and published in the local language in the countries where the product is marketed. This makes it easier to compare investments - and to find the one that is most attractive to you.
The information contained herein is not meant to be, and it shall not be interpreted as investment advice or a recommendation and investors must neither accept any offer for, nor acquire, any securities unless they do so on the basis of the information contained in the applicable investment material of a target company. Investing in securities of unlisted companies is associated with high risk.