Equity crowdfunding around the globe

The state of equity crowdfunding from the world’s most active markets

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United States

In 2012, the Jumpstart Our Business Startups (JOBS) Act was signed into law by President Barack Obama. The most utilized equity crowdfunding offerings that the general public may participate in are conducted using Regulation CF (Reg CF) and Regulation A+ (Reg A+). Rule 506(c) of Regulation D (Reg D) also enables issuers to market their opportunity to a large audience of investors but only high-net worth or accredited investors may participate in these offerings. Rule 506(c) of Reg D went into effect September 23, 2013; Reg A+ on June 19, 2015; and Reg CF on May 16, 2016.

United Kingdom

The U.K. has one of the most developed equity crowdfunding markets and falls within the jurisdiction of the Financial Services and Markets Act 2000. Seedrs was the first equity crowdfunding platform to be authorized by the Financial Conduct Authority (FCA) in 2012.

European Union (EU)

Until recently, it was very difficult for crowdfunding platforms to expand across borders. In October 2020, the European Parliament approved new rules that will enable crowdfunding platforms to easily provide services across the EU based on a single set of rules.

China

China is considered a major player in crowdfunding but the majority of its crowdfunding volume is derived from peer-to-peer consumer lending.² Equity-based crowdfunding in China refers to “internet non-public equity financing” and currently operates in a legal gray area between a private and public offering which has made it the least popular crowdfunding model.

In conclusion

According to P2P market data from the Cambridge Centre for Alternative Finance (CCAF) Cambridge, the three largest markets for crowdfunding are China, the United States, and the United Kingdom.

About Horizon

Horizon is a fintech company that builds and powers global securities exchanges with an integrated suite of software for compliant issuance, management, and secondary trading of securities. Truly a compliance-first business, our solutions combine Wall Street and Silicon Valley to power the next generation of IPOs and securities trading in the U.S. and globally. Visit us at https://www.horizonfintex.com/.

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Horizon offers a suite of integrated securities software applications for compliant issuance through secondary trading of electronic securities.

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