Since the introduction of the Retail Investor Protection Act (Kleinanlegerschutzgesetz - KASG) 2015, the legal requirements for internet service platforms (also known as crowdfunding or crowdfinancing, among other things have changed continuously. Every further development aims at an even better protection of consumers. Capital-seeking companies and investors alike will benefit from the latest changes in the EU Prospectus Regulation and the German Capital Management Act (Vermögensanlagengesetzes -VermAnlG), which came into force on 16 July 2019. We summarize the most important adjustments for you.
Higher project financing, new forms of investment and extended investment limits: With the latest amendment to the law, the federal government is giving the crowdfunding industry a real push forward. From now on, there is much more room for manoeuvre - with improved transparency.
Depending on your freely available assets, retail investors (i.e. the crowd) can now invest up to 25,000 euro per investment opportunity. Until now the upper limit was 10,000 euro. This allows you more leeway in your investment strategy. Our system automatically shows you up to which participation threshold you can invest - even if you increase your investment.
The upper limit for the offer of certain investments without a prospectus is increased from €2.5 million to €6 million per year. This does not take into account investments that have not been sold or completely redeemed. The higher amount enables us to offer significantly larger financing rounds. In addition, we will also become attractive for projects that have a higher capital requirement, which have not been able to be covered via any alternate financing platforms so far. We assume that the projects in which you can invest will become even more diversified as a result.
In addition, the prospectus requirement for swarm financings does not apply to participation rights. This means that platforms have further structuring options for their investments in addition to participatory and subordinated loans.
Christin Friedrich, Managing Director of Innovestment GmbH, is very satisfied with these adjustments: "I see the new regulations as a clear improvement for all parties involved. The higher upper limits open up a much greater scope, both for investors and for companies. As far as the addition to the investment information sheet is concerned, we fully support the decision. Transparency is our top priority anyway."
You can read the draft law adopted by the German Bundestag "on the further implementation of the EU Prospectus Regulation and on the amendment of financial market laws" here (in German).
In addition to the new opportunities, there are also new obligations. For example, the capital investment information sheet (Vermögensanlagen-Informationsblatt- VIB) will in future be supplemented by information on the issuance policy and repayment behaviour of the company being financed. This will also be to your advantage, as it will provide investors with even greater transparency.
Then you might also be interested in our article "Crowdfunding takes important hurdle in EU harmonisation".