UK Crowdfunding Association lends support to Community Shares Standard Mark
The UK Crowdfunding Association was pleased to see the recent launch of the long awaited Community Shares Standard Mark. Developed by the government-backed Community Shares Unit (CSU), the Mark aims to promote best practice standards among community enterprises crowdfunding finance through ‘community share’ offers.
Community shares are a form of equity capital unique to co-operatives and community benefit societies and can be particularly suited to communities investing in enterprises that serve a social purpose. Societies raising equity finance through community shares are currently exempt from regulation under the Financial Services and Markets Act, so we welcome this proactive move to ‘self-regulate’.
The new Standard Mark has potential to raise standards and supports UK Crowdfunding Association member platforms goals of investor education and protection.
Simon Borkin, CSU Programme lead said: “We are thrilled to have support from the UK Crowdfunding Association for the introduction of a new quality mark that will give local people more confidence to invest in community shares when the opportunity arises. With more enterprises turning to online platforms to manage their offer, it is timely that the leading trade body for the sector has given its backing.
“Our organisations have a shared commitment to ensure that crowdfunding practices meet standards of good practice and the Standard Mark is another valuable initiative to support this effort.”
Julia Groves, Director of UKCFA, said:
“The Community shares mark has real potential to become the defacto standard for those community crowdfunds that are excluded from FCA regulations. We welcome it as a significant step forward in investor protection and understanding. Well executed, it could be a real catalyst for communities doing it for themselves. We look forward to continued rapid growth in community crowdfunding with all the social and financial benefits that it can bring ”
The community shares market has grown rapidly over the last five years with over 60,000 people investing almost £60m, and more than £20m raised in 2014 alone. Community shares are most popular among renewable energy enterprises, making up 70% of equity raised in the last five years. However, there were a greater number of community share offers among community pubs and community shops.
More information on how to apply for the Standard Mark, and how to become licensed to issue the Standard Mark can be found on the Community Shares website.