KNF voices reservations concerning operation of share crowdfunding in Poland, causing considerable confusion
Some crowdfunding platforms are now applying for a brokerage licence, others are announcing only minor tweaks to their business models. Some see a sunny future for retail investors in Poland, others are fretting about the hard line adopted by the regulator. All this commotion on the Polish crowdfunding scene is observed in the wake of the Polish Financial Supervision Authority (KNF) position published in late March.
On 29 March, the KNF issued its “Position re the definition of the offering of financial instruments service set out in art. 72 of the legislative Act of 29 July 2005 on trading in financial instruments”, indicating how – in its construction – this definition sits with acquisition of shares and bonds via what is known as share crowdfunding. This triggered a wave of comments expressing a wide range of assessments and prognoses; all of a sudden, the Polish crowdfunding market finds itself in an uproar.
Uncertainty lingers as to lawfulness of the operations of crowdfunding platform
Even the title of the KNF document is confusing. In hopes of coming to grips with its contents, we approached Julia Trzmielewska, expert on capital markets at GESSEL:
“In its position paper, the KNF declared that there is some uncertainty as regards compliance of the operations of what are known as crowdfunding platforms with the law. At the same time, the regulator does not actually dispel this uncertainty – it does not come down firmly either for basic legality of share crowdfunding of for its unlawfulness”, Trzmielewska explains.
Breaking down the KNF position, the GESSEL lawyer notes that the regulator has dwelt on the following aspects of crowdfunding platforms and their functioning:
- In the course of an IPO, any promotional activities not conducted directly by the issuer are subject to restrictions; an intermediary promoting a securities issue must have the legal status of an investment firm or benefit from statutory authorisation.
- While targeting potential investors with personalised e-mail correspondence offering a crowdfunding platform, or announcing appearance of a new offer on such a platform, is permitted, such messages may not contain any reference to the terms of a specific offer (even in the form of links to a site which details the offering terms and conditions); this latter category of information is classified by the KNF as requiring a permit for offering.
Full text is available on strefainwestorow.pl