Crowdfunding intermediaries

The FIN-FSA supervises crowdfunding intermediation in cases where a company raises either equity funding or debt funding for the purpose of financing business activity.

The FIN-FSA does not supervise mediation of peer-to-peer lending, reward- or donation-based crowdfunding or money collection.

Investment-based crowdfunding

If funding is mediated to a company by offering financial instruments (e.g. shares or debt securities) as investment instruments, the activity constitutes investment-based crowdfunding by financial instrument and thereby provision of investment services subject to authorisation. To carry out such activity, the intermediary (e.g. party providing services through a crowdfunding platform) must have an authorisation as required by the Investment Services Act. As to whether the provision of investment services requires authorisation or not, it is of no consequence whether the financial instrument concerned is listed, i.e. subject to trading on a public trading venue.

A party mediating investment-based crowdfunding by financial instruments provides transmission of orders to its investor clients. Transmission of orders refers, for example, to a service in which parties to a transaction involving a financial instrument are brought together for the purpose of bringing about a transaction between those parties. Therefore, it also includes acting as a subscription venue whereby a service provider accepts subscriptions from the public, for example in connection with a share or debt securities issue and transmits the subscriptions to the manager of the issue.

If an investor is provided personal recommendations (advice), tailored to the investor’s needs, in respect of whether to buy or sell a certain investment instrument (financial instrument), the activity constitutes provision of investment advice which is subject to authorisation.

If a crowdfunding service provider provides to the issuer of a financial instrument a service for the purpose of acquiring investors, the activity constitutes placing of financial instruments which is subject to authorisation.

Mediation of investment-based crowdfunding by means other than financial instruments necessitates registration in the register of crowdfunding intermediaries maintained by the FIN-FSA.

Loan-based crowdfunding

If debt funding is mediated to a company, for the purpose of financing its business activity, by means other than financial instruments, in a manner in which a debt relationship is created between the customer of the crowdfunding intermediary and the recipient company, the activity constitutes loan-based crowdfunding. A party providing such a service must register in the register of crowdfunding intermediaries maintained by the FIN-FSA. Credit institutions, investment firms, alternative investment fund managers and payment institutions may mediate loan-based crowdfunding within the scope of their authorisation without a separate registration.