Practical Experiences with the Exemption Provisions § 2a - §2c VermAnlG of the Small Investor Protection Act (adopted on 03 July 2015)
Project period: June 2016 - Sepember 2016
Research Areas:
Partnership
Federal Ministry of Finance (BMF), Berlin
Tasks
What are the experiences of crowd investment portals, issuers and investors with the exemption provisions for small investors that where introduced in July 2015? On behalf of the German Federal Ministry of Finance project team members with backgrounds in economics and law will conduct an empirical investigation to analyse experiences to date with the Small Investor Protection Act. To this end they will use existing databases, develop questionnaires and conduct structured interviews with the interest groups and experts concerned.
Different interests need to be taken into account when start-up-firms are regulated. On the one hand, the legislator seeks to protect investors from deceptive business practices in the capital market. To this end, issuers must provide potential investors with information and are subject to extensive regulation. The provision of information and compliance with relevant legislation, however, are associated with high costs for young firms. On the other hand, the legislator is aware of the financing difficulties of these young firms and has created exemption provisions aimed at catering for the special needs of start-up firms.
The survey analyses whether crowdfunding with or without prospectuses is carried out, to what extent defaults take place, which types of financial products are used, investor structure and how the portals have reacted to the new exemptions. In addition to classical online crowdfunding, the project also analyses social and charitable projects.
Methods
Collection of data, qualitative interviews, discussion with experts.
Data and other sources
Crowdinvesting-Database, Survey among social and charitable projects.
