The New Consob Regulation on Crowdfunding

Prepared by Fabrizio Cascinelli, Francesco Della Scala, Silvia Brezigia

On the 1st of June 2023, Consob published the “Regulations on crowdfunding services“, adopted by Resolution No. 22720, following the public consultation held in March 2023.

By publishing the Regulation, Consob has completed the process of adapting the national legislation – to the extent of its competence – to the European Regulation governing crowdfunding and, in particular, European providers of crowdfunding services for companies, i.e. Regulation (EU) 2020/1503 published in the Official Journal of the EU on the 20th of October 2020 (hereinafter the “Crowdfunding Regulation“), as well as to the related Delegated Regulations.

The new Regulation is structured in five parts and covers the following topics relating to “crowdfunding service providers” (hereinafter “providers”):

  • general provisions;
  • authorization and authorization withdrawal procedure;
  • disclosure obligations towards Consob;
  • marketing communications;
  • further obligations.

With specific reference to the granting of authorisation to operate as a “crowdfunding service provider”, the European provisions of reference are those set out in the Crowdfunding Regulation (Articles 12 and 13) and the Delegated Regulation (EU) 2022/2112; Consob – in the new Regulation – in addition to recalling these provisions, provides some detailed indications on the matter to enable the proper conduct of the relevant administrative procedure.

In addition, in order to facilitate operators in submitting the authorisation application, the Authority has made available a fillable file that applicant operators may use in preparing the application; this document translates the form annexed to Delegated Regulation (EU) 2022/2112 into editable format and contains operational indications to assist in its completion.

Lastly, with regard to the authorisation regime, it should be noted that starting from the 11th of November 2023, only providers authorised under the new regulations will be able to operate in Italy; therefore, Consob has recommended that providers already currently authorised, in order to continue their activities without interruption, submit their authorisation application in due time, also in consideration of the timeframe for the granting of authorisation under European regulation.

As part of the providers’ disclosure obligations, the new Regulation provides that the form containing the Key Investment Information Sheet (KIIS) referred to in Articles 23 and 24 of the Crowdfunding Regulation must be drafted in Italian in order to ensure maximum comprehension and awareness of investors and must be made available to Consob at the same time as it is made available to investors, in accordance with procedures that will be clarified in specific operating instructions.

Moreover, it is established the obligation for providers to communicate without delay to Consob and the Bank of Italy the dates of the start of the use of the authorisation, of the interruption and of the restart of the crowdfunding service supply, as well as any substantial modification of the authorisation conditions; when fully operational, by the end of January of every year, providers will have to communicate to Consob the periodical information provided for at European level (indicated by Article 16 of the Crowdfunding Regulation).

More details have been defined with regard to marketing communications concerning the services offered; in particular, the Consob Regulation specifies the conditions that must be met by such communications, in accordance with the provisions of other related regulations such as those on investment services or offers of financial instruments to the public. In addition, specific requirements have been laid down for marketing communications relating to the individual management of loan portfolios.

Compared to what was stated in the consultation document, the provision of transmission of marketing communications to the Authority has been eliminated, in order to reduce the burden on providers.

Also for marketing communications, the language to be used is Italian (the use of English is forbidden, as for the KIIS).

The last two articles of the new Regulation concern the additional obligations on providers arising from the civil law regime and the alternative regime for the transfer of shares representing the capital of limited liability companies, as defined in Article 100-ter, paragraphs 1 and 2, of the Consolidated Law on Finance (“TUF”), in order to provide operators with an integrated framework of obligations and to ensure compliance with the limits and conditions set forth in other regulatory texts.

Finally, it should be noted that Consob, in the general provisions of the Regulation, has indicated the PEC address to be used for the communication and transmission of authorisation applications and all possible information and documentation.

The new Regulation will enter into force on the day following its publication in the Official Gazette, which has not yet occurred; at the same time, the “Regulation on the raising of capital through online portals“, adopted by Consob Resolution No. 18592 of 26 June 2013, will be abrogated.

At the same time, on the same date of the 1st of June 2023, Consob published another Resolution (Resolution No. 22721) aimed at amending the Regulation on the Arbitrator for Financial Disputes (“ACF”) in order to confirm the ACF’s jurisdiction over disputes between investors and crowdfunding service providers.

In particular, it was necessary to integrate Article 4, paragraph 1, of the ACF Regulation, which defines its relative field of operation, by including an express reference to Regulation (EU) 2020/1503 in order to clarify that disputes relating to the breach by crowdfunding service providers of the diligence, fairness, information and transparency obligations established by the European regulation towards investors fall within the ACF’s jurisdiction.

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Fabrizio Cascinelli

PwC TLS Avvocati e Commercialisti