Starting today, only platforms with a license from the Czech National Bank (ČNB) can offer so-called investment crowdfunding, i.e. group financing of companies and their projects.
“Crowdfunding platforms will now have to comply with similar rules as, for example, investment intermediaries or securities traders,” said Petr Kincl, managing partner of PwC Legal. According to Kincl, the new regulation, which Parliament approved last year on the basis of a European regulation, is primarily aboutthey protect clients from unfair practices and ensure sufficient access to information.
“Until now, only partial regulations existed in the Czech Republic, now all crowdfunding platforms will be governed by uniform rules and will be under the supervision of the central bank,” he added.
CNB stated that by November 10, crowdfunding platforms must it is not enough to simply ask for permission to continue to operate. “The deadline for granting a permit from the CNB is three months, but it starts to run only after the delivery of a complete application, and in addition, this deadline can be interrupted during the licensing procedure if updated information is submitted. In practice, the duration of the authorization procedure can thus exceed the three-month period, even significantly,” the central bank stated.
Platforms that do not obtain a license within the specified period will only be able to manage contracts that relate to crowdfunding offers that have already ended. If they provide new offers without a license, it will be considered an unauthorized performance of activity, which can be penalized by the CNB under the Act on Business on the Capital Market.
Czechs are increasingly attracted to investing as a game. Investment crowdfunding is growing rapidly and offers an appreciation of up to 12 percent
Investing in iconic shares like Apple or in mutual funds according to ESG principles is nothing new. However, the fact that it is possible to invest in specific companies directly here with an average 12 percent appreciation is still not that well known. Through so-called investment crowdfunding, you can support brands such as Remoska, the revitalized Znojmo city brewery, or the mattress and blanket factory PiCaSo from Mikulov, or the family-owned lighting company Decoled, even with a mere thousand crowns.
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Real estate crowdfunding will get new rules. It will be more credible for investors
In Europe, regulation will also gradually apply to the field of real estate micro-investments, i.e. so-called real estate crowdfunding. Because of this, the European Parliament approved a special regulation in 2020, which already entered into force last year. Now is the transition period, when by next year all EU countries must prepare so that the regulation can work and all platforms can apply for a license. All of this should bring greater certainty and confidence to the new real estate business, says Jan Večerka, director of the BrikkApp real estate platform.
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