On 20 July 2020, the Council of the EU announced that it had adopted a Directive and a Regulation on crowdfunding. The Council’s press release on the new legislative measures states:

• The new legislative framework is part of the EU Capital Markets Union project.
• It will remove barriers for crowdfunding platforms to provide their services cross-border by harmonising the minimum requirements when operating in their home market and other EU countries. It will also increase legal certainty through common investor protection rules.
• The new rules will cover crowdfunding campaigns of up to EUR 5 million over a 12 month period.
• Larger operations will be regulated by MiFID II and the Prospectus Regulation.
• Reward- and donation-based crowdfunding fall outside the rules’ scope since they cannot be regarded as financial services.
• The rules for EU crowdfunding businesses will be tailored depending on whether they provide their funding in the form of a loan or an investment (through shares and bonds issued by the company that raises funds).
• The framework defines common authorisation and supervision rules for national competent authorities.

The Regulation now needs to be adopted by the European Parliament at second reading before it can be published in the Official Journal and enter into force.