Regulating Crowdfunding - Crowdfunding: Deep cr .Proposition •Crowdfunding is new and better...
Embed Size (px)
Transcript of Regulating Crowdfunding - Crowdfunding: Deep cr .Proposition •Crowdfunding is new and better...
Regulating CrowdfundingKey Considerations
Deep Impact - India 21st March 2015
Crowdfunding is new and better finance.
Bad regulation will damage it, constrain it,
and reduce its inherent benefits.
Regulation of crowdfunding requires new
Is Regulation a Good Thing?
Unique Value of Crowdfunding
Novel expectations of return
Closer to market
Often locally focused
Grow the market
Crowdfunding Risk Mitigation
To Grow Crowdfunding Requires
Low transaction costs
Low barriers to participation
Four Models of Crowdfunding
Who can participate
How to Regulate?
How they behave
What they are told
How to Respond?
The Common Law Approach
Outsourcing regulated activities
Becoming regulated bodies
Changing the nature of the investment
Operating below thresholds
Satisfy a Mix of Regulation
The Associated Press
Photo: Ian Sewell, Wikipedia
Common misconception that UK equity
crowdfunding was unregulated prior to April 2014
UK equity crowdfunding exists in spite of regulator not because of it
Awaiting Tier 3
Need to extend law
Increases risk Reducing transparency
Drive up investment size
Reduces the value of crowdfunding Reduce engagement
Distort novel expectation (the usual suspects)
Crowdfunding Being Treated Like Old Finance
Average Investment Size
Individual offers have averaged 8,500
They will not understand the
philosophy or the procedures of this (Grameen) bank,
You cannot create the bank of the poor with the same architecture as the
bank of the rich.
On bank regulators also regulating
07717 814 595