Regulating Equity Crowdfunding: Lessons from International Practice

Emmanuel Schizas (), Thomas Kenneth Bennett and Waleed Samarah
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Emmanuel Schizas: University of Cambridge
Thomas Kenneth Bennett: University of Cambridge
Waleed Samarah: University of Cambridge

A chapter in The Palgrave Handbook of Technological Finance, 2021, pp 477-507 from Springer

Abstract: Abstract Equity crowdfunding adds value insofar as it enables investors to efficiently diversify their portfolios and outsource due diligence to more experienced investors. Using a recent, global survey of regulators, we interpret regulatory practice in terms of efforts to enhance these properties, and find little consensus or convergence around good practice. We distinguish between ‘gatekeeper’ models of regulation, which restrict investor participation; ‘simple intermediary’ models which attach little liability for outcomes to the platforms; ‘bespoke hosted’ models, which focus on maximising retail participation; and ‘public offering’ models which aim to replicate the protections offered by traditional securities law. Finally, we ask whether an approach aimed at improving signalling quality might outperform what are currently considered best practices.

Keywords: Equity crowdfunding; Fintech; Financial regulation; Venture capital; Business angels (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-65117-6_20

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DOI: 10.1007/978-3-030-65117-6_20

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