The reason why only partiary subordinated loans as shares in start-ups are distributed in Germany for the commercial crowd investor is mainly due to the Prospectus Directive ( Directive 2003/71 / EC ) and its implementation in Germany in the form of the Securities Prospectus Act (WpPG).
Current legal situation
Paragraph 3 (1) of the WpPG states that, in principle, a securities prospectus must be prepared and published for the sale of securities. Partial subordinated loans, however, are usually regarded as investments and are therefore not affected by the WpPG. That says at least my understanding as a lay lawyer. Since the creation of such a prospectus is extremely expensive, it is gladly waived and dodged on partiary subordinated loan. For us as crowd investors, this is not a downfall, but the majority of investors would prefer to invest in “real shares” in the form of, for example, equities. And I, too, have my symptoms ?
The new prospectus regulation
Fortunately for us , the European Union is working to deepen the European capital markets , which should, inter alia, promote better access and easier capital raising for small and medium-sized enterprises. One of the measures for pursuing these goals is the replacement of the Prospectus Directive mentioned above by the Prospectus Regulation . Compared to the Prospectus Directive, this has direct legal force after its entry into force (ie would not have to be implemented by the German state) and leads to a harmonization of the European prospectus rules.
Influence of the Prospectus Regulation
The German WpPG already has the exception that the capital raising of amounts of less than € 100,000 is not covered by the prospectus obligation. This threshold will be raised by the prospectus regulation in the future to € 1,000,000, that is: In the future, a company can collect funds of € 1 million, for example, crowdfunding without a prospectus to publish. This exemption can even be raised nationally to € 8 million.
While the Prospectus Regulation enters into force on the twentieth day following publication in the Official Journal of the European Union, most of the regulations will not be in force until 24 months later. However, the minimum threshold exception 12 months later, ie no delays in the legislative process should occur in mid-2018.
The proposed Prospectus Regulation is intended to replace the current Prospectus Directive and make it easier for companies to raise funds. In my opinion, this will in fact be achieved, in particular, by the exemption from the prospectus on capital of less than € 1 million.
At the same time, for us crowdfunders, this means that after the regulation comes into force, platforms will also be launched in Germany and campaigns for real equity will be offered to start-ups, which should give crowdfunding a small boost once again. What is your opinion about this?
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