Crowdfunding platforms to test future regulation of their market

The Bank of Russia has started voluntary testing of crowdfunding regulation principles. Its outcome will help improve the bill ‘On Alternative Investment Raising (Crowdfunding)’.

The regulation principles serving as the basis for the bill are the result of the work of a special Bank of Russia task force for consumer risk monitoring, and assessing and elaborating proposals for crowdfunding regulation.

Over 10 of the largest platforms operating in various crowdfunding market segments, and cooperating with the Bank of Russia for over two years in monitoring the crowdfunding market, volunteered to try out the future regulation blueprint.

The regulatory requirements tested are in line with effective legislation and aimed at improving risk management, disclosing information about the platform’s operations and projects, differentiating qualified and unqualified investors by the maximum risk they accept, disclosing information about project selection, avoiding conflict and elaborating detailed operational rules, including those associated with settlements.

At the task force meeting held at the Bank of Russia on 7 February, representatives of crowdfunding platforms asked questions, made comments and offered suggestions on the bill’s fine-tuning.

The outcomes of testing are to be summarised in the second quarter of 2018.