Droit des sociétés | Un nouveau cadre pour le financement participatif

In the face of the rise in crowdfunding, the French legal framework was amended by the ruling of 22 December 2021, which was then set forth in the decree of 1st February 2022. Herein our Corporate department reviews the four main provisions of these reforms.

As we already mentioned in 2015 (Le Crowdfunding : nouvel eldorado pour les entrepreneurs ?), crowdfunding, which allows project owners to be put in contact with investors through an online platform for the purpose of obtaining financing (donations, loans, or capital investments) is growing rapidly and currently stands at around 5 billion euros of funding.

In 2021 only, almost 2 billion euros were collected (an increase of 84% compared to 2020 – according to the Barometer of Crowdfunding 2021 – FPF – Mazars).

France was one of the first countries to establish a legal framework for this type of funding (ruling n°2014-559 of 30 May 2014).

In October 2020, the European legislator undertook the harmonisation of the rules governing crowdfunding (EU) regulation 2020/1503 of 7 October 2020) and in particular by means of crowdlending and share subscription.

It therefore became necessary to ensure French legal framework compliancy.

The first stage in the transposition was ruling n° 2021-1735 of 22 December 2021 which was then set forth in decree n° 2022-110 of 1st February 2022.

The main provisions of these reforms are the following:

1. Reduction of the threshold for offers covered by crowdfunding

The threshold set for financial securities and instruments for crowdfunding offers is reduced to 5 million euros instead of 8 million euros.

2. Creation of PSFP (Prestataire de Services de Financement Participatif – Crowdfunding Service Provider) status

The European regulation created a new status for any operator of the crowdfunding sector, that of Crowdfunding Service Provider (CSP).

In order to be compliant with this regulation, in particular, the ruling of 22 December 2021 created in France the obligatory PSFP (Prestataire de Services de Financement Participatif – CSP) status and adapted the pre-existing crowdfunding operator statuses:

1/ the CIP (Conseiller en Investissement Participative – crowdfunding advisor) status is eliminated;

2/ the faculty of PSI (Prestataire de Services D’investissement – investment service provider) to exercise crowdfunding activities is eliminated;

3/ the activity of IFP (Intermédiaire en Financement Participatif – crowdfunding intermediary) is restricted to donations and interest-free loans.

CIP and IFP who were registered prior to 10 November 2021 with the ORIAS (the French consolidated registry of insurance, banking and finance intermediaries) and those PSI concerned have until 10 November 2022 to obtain PSFP accreditation. Until such that date, they may continue exercising their activity within the legal framework that applied to them before the ruling of 22 December 2021 came into force.

3. Accreditation and supervision processes for PSFP

PSFP must receive accreditation from the AMF (the French financial markets authority). If the business plan presented by the applicant comprises facilitating loan awards, such accreditation will be given on the basis of the assent of the ACPR (French prudential control authority).

Once the PSFP have received accreditation, they are registered by the AMF, which holds a record of all European PSFP and makes it available to the general public via its website.

The AMF also has jurisdiction to monitor and, where necessary, order the withdrawal of such accreditation.

European PSFP status will be established progressively until 10 November 2022 within the framework of the provisions laid out in the French Monetary and Financial Code by the ruling of 22 December 2021 and the decree of 1st February 2022.

4. Elimination of minibonds

The 2021 ruling eliminated the system of minibonds that had been created under the ruling of 28 April 2016 and which could be subscribed to on crowdfunding platforms.

These securities formalised a loan to the company granted by its investors who had to receive repayment of the amount borrowed, together with accrued interest, within a maximum of 5 years.

Investments already carried out in the form of minibonds are not affected by the new measures and their eligibility for PEA-PME (French share savings plan for the financing of French SME and ISE) is maintained until 10 November 2022 (French Monetary and Financial Code article L. 221-32-2, rep.). Minibonds that are already invested in PEA-PME at that date can therefore be maintained.

On the other hand, after 10 November 2022, minibonds can no longer be offered.

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