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Alternative Investment Platforms(regulatory update)

Philippe De Prez – 9 February 2017

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Alternative Investment

Business Finance

Crowdfunding Platforms

Non financial return

Donation based

Reward based

Financial return

Lending based

Equity based

PersonalFinance

Consumer Lending platforms

Direct P2P Lending

Indirect lending

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Before February 1, 2017

No specific crowdfunding legislation

Applicability of existing legal framework:

The Prospectus law – public offer (16/06/2006) Banking monopoly (art. 68bis - 16/06/2006 Law) The UCI Law (3/8/2012) The investment company law (6/4/1995) The Payment Institutions Act (21/12/2009)

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As of February 1, 2017

The Crowdfunding law of December 18, 2016

Introducing new legal concepts Alternative Finance Services Alternative Finance Platforms

Modifying 2006 Prospectus law Raising the exemption thresholds: 300.000 EUR/project & 5.000 EUR/investor

Activating 2015 tax shelter

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Alternative Finance Services“A service* consisting of commercialising, through an electronic platform, investment instruments issued** by (i) entrepreneurs-issuers, (ii) starter funds or (iii) financing vehicles”

**Private / public offer ! Out of scope ! legal persons qualified investors < 150 persons

*No investment service, safe for: Investment advice; and Reception & transmission of client orders, In line with those financial instruments

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Alternative Finance Platforms“legal or natural persons, offering alternative finance services in Belgium*, without being a regulated entity** ”

*In Belgium: “.be” extension Belgian publicity Belgian regulation Belgian entrepreneurs

**Regulated entity Credit institution Investment institution

CASHSLESS LIMITED INVESTMENT SERVICES

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Alternative Finance Services

Alternative Finance Platforms

(crowdfunding platforms)

Specific FSMA License

Regulated entities(Credit / Investment institutions)

No specific additional license

Notification of intention

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AF Platform License

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AF Platform LicenseLicense application contains information on: Company Shareholders Effective leaders Organisation:

Type of instrumentsBusiness model IT structure Insurance

Specific Features: Rules of conduct 2.500 EUR fix analysis fee FSMA makes a decision within 3 months (complete file) Transition regime for existing platforms ( 31/03 31/05)

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Alternative Investment

Business Finance

Alternative Finance Platforms(Crowdfunding)

Non financial return

Donation based

Reward based

Financial return

Lending based

Equity based

PersonalFinance

Consumer Lending platforms

Direct P2P Lending

Indirect lending

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Alternative Lending to Consumers

Borrower

Lender

P2P Platform

Requesting a loan / down payments

Lending money / return on the loan

ISSUING STRD. LOAN

MATCH MAKING

GRANTING /INVESTING IN LOANS

DIRECT P2P MODEL

INDIRECT ALTERNATIVE CONSUMER LENDING

Borrower

Lending Platform

Investor

GRANTING LOANISSUING NOTES

INVESTING IN NOTES

Requesting a loan / down payments

Investing in platform notes / return on the notes

REQUESTING LOAN

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Alternative Lending to Consumers

Borrower

Lender

P2P Platform

Requesting a loan / down payments

Lending money / return on the loan

ISSUING STRD. LOAN

MATCH MAKING

GRANTING /INVESTING IN LOANS

DIRECT P2P MODEL

INDIRECT ALTERNATIVE CONSUMER LENDING

Borrower

Lending Platform

Investor

GRANTING LOANISSUING NOTES

INVESTING IN NOTES

Requesting a loan / down payments

Investing in platform notes / return on the notes

REQUESTING LOAN

Regulatory consequences

Crowdfunding law? out of scope

Lending side:Prior approval credit contracts (FPSE)Consumer Credit Provider (FSMA)

Funding side:Prospectus obligations (FSMA)

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Take Away

New Crowdfunding law

Crowdfunding with financial return (!)

Cashless & limited investment services

No Passport

Alternative consumer lending: out of scope

Alternative Finance Platforms…

How can we help you?Get in touch

www.simontbraun.eu DigitalFinance@simontbraun.eu

Philippe De Prez – 9 February 2017