What the ECSPR actually regulates and what it doesn’t

The European Crowdfunding Service Providers Regulation (ECSPR) created the first uniform legal framework for crowdfunding across Europe. The public perception is often that the regulation comprehensively covers the entire crowd investing process. In practice, however, its scope is clearly defined. In order to realistically assess the market, it is important to understand what the ECSPR specifically regulates and which areas are expressly not covered.

The ECSPR is primarily aimed at crowdfunding platforms as service providers. It defines the conditions under which platforms may broker financing and specifies organizational, procedural, and information-related obligations. These include requirements for corporate organization, the handling of conflicts of interest, the provision of standardized investor information, and the design of the investment process. The aim is to create a reliable framework within which investors can make informed decisions.

However, the economic quality of individual projects or their prospects of success are not regulated. The ECSPR does not prescribe which projects may be offered, nor does it guarantee returns or protect against economic losses. The assessment of business models, real estate, or financing structures is also not within the scope of the regulation. Responsibility for investment decisions remains expressly with investors.

Similarly, the ECSPR does not replace other existing areas of law. Tax treatment, corporate law issues, or insolvency law rankings are not regulated by the ECSPR but remain subject to national law. Issues such as secondary markets, liquidity, or exit options are also addressed only to a very limited extent and remain heavily dependent on the respective market structures in practice.

The delimitation of the scope of regulation is not a shortcoming, but a conscious decision. The ECSPR is intended to create transparency and uniform minimum standards without interfering with entrepreneurial freedom or individual risk decisions. For investors and project initiators alike, this means that regulation provides clear rules of the game. However, it does not replace their own examination of risks, structures, and economic contexts.