Abstract
During recent years, crowdfunding platforms have settled into the
marketplace, becoming a real alternative mean to raise funds. In approaching the recent Regulation (EU) no. 2020/1503 on “European Crowdfunding Service Providers” (ECSPR), the article aims to examine the individual portfolio management of loans due to its peculiar characteristics which single this service out from those generally offered by lending-based crowdfunding platforms.
The individual portfolio management of loans entails the allocation of a
predetermined amount of funds of an investor to one or multiple crowdfunding
projects, in accordance with a specific mandate. Unlike what generally happens with the credit provided through the traditional banking intermediation, therefore, the client is not directly selecting the project they want to invest in. Rather, the client indicates the parameters against which the crowdfunding service provider will sort out how to allocate the funds. The mandate thus becomes an extremely relevant factor as it allows, ex ante, the choice of investment and, ex post, the evaluation of the results produced by the management activity, provided that the crowdfunding service provider does not take any risk of its own, and, thus, the risk remains entirely on the investor. Such interesting relationship between the crowdfunding service provider offering individual portfolio management of loans and the investor eventually calls for an enhanced level of investor protection which translates into a wide set of transparency obligations and disclosure requirements.
marketplace, becoming a real alternative mean to raise funds. In approaching the recent Regulation (EU) no. 2020/1503 on “European Crowdfunding Service Providers” (ECSPR), the article aims to examine the individual portfolio management of loans due to its peculiar characteristics which single this service out from those generally offered by lending-based crowdfunding platforms.
The individual portfolio management of loans entails the allocation of a
predetermined amount of funds of an investor to one or multiple crowdfunding
projects, in accordance with a specific mandate. Unlike what generally happens with the credit provided through the traditional banking intermediation, therefore, the client is not directly selecting the project they want to invest in. Rather, the client indicates the parameters against which the crowdfunding service provider will sort out how to allocate the funds. The mandate thus becomes an extremely relevant factor as it allows, ex ante, the choice of investment and, ex post, the evaluation of the results produced by the management activity, provided that the crowdfunding service provider does not take any risk of its own, and, thus, the risk remains entirely on the investor. Such interesting relationship between the crowdfunding service provider offering individual portfolio management of loans and the investor eventually calls for an enhanced level of investor protection which translates into a wide set of transparency obligations and disclosure requirements.
| Originalsprog | Engelsk |
|---|---|
| Tidsskrift | Law and Economics Yearly Review |
| Vol/bind | 10 |
| Udgave nummer | 1 |
| Sider (fra-til) | 142-162 |
| ISSN | 2050-9014 |
| Status | Udgivet - 2021 |
Bibliografisk note
This research has been carried out within the Jean Monnet Chair in Digitalisation in EU Financial Studies (EUDIFIN) − 611917-EPP-1-2019-1-IT-EPPJMO-CHAIR. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein. Although this article is the result of a joint reflection, par. 1 and 5 can be primarily attributed to Nina Dietz Legind, with the remaining sections primarily attributable to Andrea Minto.Fingeraftryk
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