On 15 January 2020, the Cyprus Securities and Exchange Commission issued a policy statement outlining its finalised rules for investment-based crowdfunding and a press release announcing the policy statement and the intended publication of a directive on investment-based crowdfunding.

In particular, the press release refers to CySEC’s previous publication of a consultation paper on 15 November 2019 (Consultation Paper) on the introduction of a set of complementary rules regarding investment-based crowdfunding, announcing that the relevant rules are due to be issued by means of a directive (the Crowdfunding Directive).

In the press release, CySEC notes that the Crowdfunding Directive relates solely to investment-based crowdfunding through transferable securities and excludes loan-based, reward-based and donation-based crowdfunding. It further states that the Crowdfunding Directive comprises a set of secondary rules for investment-based crowdfunding and is in this respect complementary to obligations under MiFID II, including, among others, conduct of business rules, management of conflict of interests, the holding of clients’ money and financial instruments as well as product governance rules, in a proportionate manner.

In turn, the policy statement summarises the feedback received in response to the Consultation Paper and sets out CySEC’s final position on the subject matter.

CySEC’s press release can be found here.

CySEC’s policy statement can be found here.

Harneys’ previous blog post on the consultation paper can be found here.