Practical Experiences with the Exemption Provisions § 2a - §2c VermAnlG of the Small Investor Protection Act since 1 June 2016

Tasks

What experience have crowd investing portals, issuers and investors had over the last two years with the exemption regulations of the Small Investor Protection Act introduced in July 2015? On behalf of the Federal Ministry of Finance, the project team is conducting an empirical survey to examine the experiences with the Small Investor Protection Act. They use existing databases and develop questionnaires for this purpose.

The regulation of start-up companies often leads to a conflict of objectives. On the one hand, legislators want to protect investors from fraudulent activities on the capital market. To this end, issuers must make information available to potential investors and are subject to far-reaching regulation. However, the provision of information and compliance with the relevant laws are associated with high costs, especially for young companies. On the other hand, the legislator is aware of the financing difficulties of young companies. For this reason, it has created exemption provisions aimed at the special needs of start-up companies.

For the period since June 2016, the study examines whether crowdfunding is carried out with or without a securities prospectus, to what extent defaults have already occurred, which type of financial products are used, which investor structure exists and how the portals react to the new exemption provisions. In addition to the classical crowdfunding of companies and real estate the financing of social and charitable projects is also examined.

Methods

Collection of data, qualitative interviews, discussion with experts.

Data and other sources

Crowdinvesting database, survey of social and charitable projects.