European Commission considers regulation of crowdfunding

Originally posted in Reuters

The European Commission said on Thursday it is examining whether to regulate crowdfunding, an alternative source of financing via the Internet, and has started to gather views from industry and citizens.

Although any legislation would be unlikely to come before 2015, after the changeover of commissioners in charge of the EU’s executive, the launch of the consultation signals a continued desire to extend EU rules in finance.

Michel Barnier, the commissioner in charge of regulation, said that he was considering whether to propose common pan-EU rules for crowdfunding, which pools money often via the Internet for projects including company start-ups.

“Crowdfunding is becoming increasingly important,” said Barnier in a statement. “Do we need a single European framework to support both those who develop crowdfunding platforms and to reduce the risks to those who make use of such platforms to finance projects?” he asked.

Any move would likely follow the United States. FINRA, Wall Street’s industry-funded watchdog, said in January it was working with the Securities and Exchange Commission (SEC) to draft rules that would govern crowdfunding.

However, Barnier’s announcement comes a day after the Commission pledged to pare back new legislation, in an effort to answer intensifying criticism of what many in member states see as overregulation by Brussels.

(Reporting by John O’Donnell; Editing by Christina Fincher)