Investor protection clarified in crowdfunding
From now on investors will have better information on crowdfunding projects. The decree of the Ministry of Finance issued on Thursday 8 December specifies the obligations concerning the provision of information in the Crowdfunding Act.
The decree specifies the information to be provided on the company, the investment project and the investment instrument when applying for crowdfunding. This enables the investor to understand better what the company, the investment project as well as the investment instrument are really like. For example, the company must state clearly and in a readily understandable way the risks that may be involved regarding both the company and the investment.
Financing obtained at lower cost
The reform will facilitate and clarify the obligation to provide information, which contributes to higher efficiency and reduces the costs of the financing operations. This is based on the fact that the documents will be largely harmonised in terms of their content and structure.
It will be easier for the investors to compare the various purposes of investment when all companies give the information in the same form when seeking crowdfunding.
– Wider use of crowdfunding is an example of how technology impacts on traditional sectors. It is important for the legislators to follow the changes taking place in our world, says Petteri Orpo, Minister of Finance of Finland.
The decree enters into force on 15 December. It supplements the Crowdfunding Act that entered into force in the beginning of September.
Decree of the Ministry of Finance on Crowdfunding Recipient's Disclosure Obligation – unofficial translation
Crowdfunding Act enters into force in September (press release 25 August)
Crowdfunding Act to provide new financing options for business growth (press release 7 April)
Why is the Crowdfunding Act needed? Questions and answers (12 April)
Inquiries:
Aki Kallio, Ministerial Adviser, tel. +358 295 530 477, aki.kallio(at)vm.fi
Armi Taipale, Legislative Counsellor +358 295 530 399, armi.taipale(at)vm.fi