×
You will be redirected back to your article in seconds

Crowdfunding Sites Face Stricter Controls in U.K.

New rules set to be in place in April

LONDON — Tighter rules governing crowd-funding platforms have been drafted in the U.K., which could hit indie pic financing.

U.K. financial regulator the Financial Conduct Authority has proposed a new regulatory regime for the platforms, which it intends to introduce in April.

It is proposed that a company operating a loan-based crowdfunding platform will need to be authorized to do so by the FCA, and so will incur extra expense and become subject to a significant number of new rules.

The changes will also hit platforms that use the investment model. The promotion of unlisted shares or debt securities will be tightly controlled. They will only be able to be offered to clients who: are certified sophisticated investors or high net worth investors; who confirm that they will receive regulated investment advice or investment management services from an FCA-authorized person; and who certify that they will not invest more than 10% of their net investible portfolio in unlisted shares or unlisted debt securities.

The new rules will also require operators of platforms to assess the suitability of investors who have not been provided with advice.

Law firm Harbottle & Lewis said Monday that if the draft rules are implemented, the need for loan-based crowdfunding platforms to be authorized by the FCA “will unavoidably increase the barriers to the market-place for operators and may mean that a number of the existing operators are not able to bear the increased costs of regulatory compliance. The changes will, however, mean that the ‘crowd’ is better protected from platforms that fail.”

The firm added: “The proposed rules that apply to investment-based platforms increase the regulatory burden on operators who will now be required to carry out more careful checks on those that invest through their platform. From the crowd’s perspective, these rules will have the effect of making the process of investing more cumbersome and will restrict access to some.”

The proposed rule changes will not impact platforms that follow the donation or reward model of crowdfunding, such as Kickstarter and Indiegogo. In these the crowd gives money to a company whose project or activities it wants to support, often in exchange for a reward, service or product.

More Film

  • Osmosis

    Netflix Unveils Four More French Originals, 'Gims,' 'Anelka,' 'Move,' 'Of Earth And Blood'

    As it prepares to open a fully-staffed office in France and ramp up its investment in local originals, Netflix has unveiled three new documentaries, “Move” (working title), “Gims” (working title), and “Anelka” (working title), and the feature film “Of Earth And Blood” while at Series Mania in Lille. Announced during a panel with Netflix’s commissioning [...]

  • Miramax Developing 'I Won't Be Home

    Film News Roundup: Miramax Developing 'I Won't Be Home for Christmas'

    In today’s film news roundup, “I Won’t Be Home for Christmas” is in the works, the NFL has made a documentary about female team owners and D Street Pictures has signed Kenny Gage and Devon Downs to direct the dance feature “Move.” HOLIDAY PROJECT Miramax has acquired film rights to Lauren Iungerich’s holiday-themed screenplay “I [...]

  • Michael B. Jordan arrives at the

    Michael B. Jordan to Star in Warner Bros.' 'Methuselah' Movie

    Michael B. Jordan will produce and star in a “Methuselah” movie for Warner Bros., based on the Biblical story of a man who lived to be 969 years old. Jordan will produce through his Outlier Society production company along with Heyday’s David Heyman and Jeffrey Clifford. Warner Bros. has been developing the project for many [...]

  • Davids Chief Piera Detassis on Revamping

    Davids Chief Piera Detassis on Revamping Italy's Top Film Awards

    Piera Detassis recently became the first woman to head the David di Donatello Awards, Italy’s equivalent of the Oscars. Since then she’s been busy overhauling the inner workings of the prizes that will be awarded on Wednesday. Detassis, also the editor of Italian film publication Ciak, spoke exclusively to Variety about the challenges she’s faced [...]

  • Matteo Garrone's 'Dogman' Leads Davids Awards

    Matteo Garrone's 'Dogman' Leads Davids Awards Race

    With 15 nominations Matteo Garrone’s “Dogman” leads the pack of contenders for Italy’s David di Donatello Awards in a watershed year for the country’s top film nods that sees highbrow auteur titles reaping most of the David love just as local box-office grosses hit an all-time low. Garrone’s gritty revenge drama is followed closely with [...]

  • steven spielberg Apple TV Plus

    Steven Spielberg's Apple Appearance Riles Up Social Media: 'Big Old Mixed Message'

    Many Hollywood heavyweights flocked to Apple’s Cupertino, Calif. headquarters to help reveal the tech giant’s revamped steaming service Apple TV+ on Monday — but one such legend was so polarizing he became a national trending topic on Twitter for simply showing his face. Steven Spielberg was the first to appear in a dramatic short film [...]

  • Michael Lynne

    Former New Line Co-Chairman Michael Lynne Dies at 77

    Michael Lynne, the former co-chairman of New Line Cinema who played a key role in shepherding “The Lord of the Rings” trilogy, has died at his New York home. He was 77. Lynne’s death was confirmed Monday by longtime business partner Robert Shaye, who told Variety that Lynne’s family had informed him of Lynne’s passing [...]

More From Our Brands

Access exclusive content