The Legal Obligations of Crowdlending

Le crowdlendingParticipatory lending is a financing method that allows individuals to invest in projects by lending money to businesses or individuals. Although this funding model has grown in popularity in recent years, it is essential to understand the legal obligations surrounding it. In this article, we will explore the main legal requirements of crowdlending, to help you navigate this world while protecting yourself.

1. What is crowdlending?

Before getting to the heart of the matter, it's important to define what crowdlending is. Unlike traditional crowdfunding, which is based on donations or pre-sales, crowdlending involves a return on investment in the form of interest. Crowdfunding platforms bring borrowers and lenders together, facilitating the financing process.

2. Regulations in force

2.1. European regulations

At European level, crowdlending is governed by the Payment Services Directive (PSD2) and the Markets in Financial Instruments Directive (MiFID II). These regulations aim to protect investors and ensure the transparency of transactions. Crowdfunding platforms must comply with these regulations in order to operate legally.

2.2. French regulations

In France, crowdlending is mainly regulated by the Autorité des marchés financiers (AMF) and the Organisme pour le développement de l'économie numérique (ODEC). Platforms must obtain authorisation to operate. This approval guarantees that the platform complies with strict standards in terms of transparency, security and investor protection.

3. Obligations of crowdlending platforms

3.1 Investor information

Crowdfunding platforms are obliged to provide clear and accurate information to investors. This includes details of the projects financed, the associated risks and the repayment terms. Investors must be able to make informed decisions before lending their money.

3.2. Project assessment

Before publishing a project on their platform, companies have to go through a rigorous assessment process. Platforms are required to check the viability of projects and the creditworthiness of borrowers. This reduces the risks for investors and ensures a certain level of quality for the projects proposed.

3.3 Fund management

Platforms must also comply with fund management obligations. The sums collected must be kept in separate accounts to guarantee the security of investments. In addition, platforms must ensure that the funds are used in accordance with the objectives announced at the time of the funding campaign.

4. Investors' obligations

4.1. Understanding risks

Investors also have legal obligations. They must be aware of the risks associated with crowdlending, particularly the risk of capital loss. Platforms are obliged to provide information about these risks, but it is also up to investors to inform themselves and understand the issues before committing themselves.

4.2. Investment limits

Certain regulations impose investment limits to protect non-professional investors. For example, in France, an individual investor may not invest more than €1,000 per project and €2,000 per year on a crowdlending platform. These limits are designed to prevent investors from jeopardising their financial situation.

5. Recourse in the event of a dispute

5.1. Mediation

In the event of a dispute between an investor and a crowdlending platform, there are legal remedies. Investors can call on mediators to try to resolve the dispute amicably. Platforms must inform their users of the mediation procedures available.

5.2. Legal proceedings

If mediation fails, investors can take legal action. It is essential to keep all evidence and documents relating to the investment to support the claim. Crowdfunding platforms are obliged to comply with the laws in force and may be held liable if they fail to do so.

Crowdfunding is an attractive financing alternative, but it is crucial to understand the legal obligations surrounding it. Whether you are an investor or a borrower, it is essential to be aware of the regulations in force and to comply with the obligations that arise from them. To find out more about crowdlending and its implications, don't hesitate to consult specialist resources such as Quelinteret.com, which offers articles and guides to help you navigate this complex world.

By complying with these obligations, you can enjoy the benefits of crowdlending while minimising the associated risks. Whether you're a seasoned investor or a novice, understanding the rules of the game is the key to success in the world of crowdlending.