Latvian 'crowdfunders' reminded to register with regulator

At the end of last year, a new segment - crowdfunding service providers – joined the financial market participants supervised by the Financial and Capital Market Commission (FKTK). The regulator on January 7 issued a reminder that companies offering such services need to register and get approval before they can do so.

"The provision of crowdfunding services is subject to authorisation of competent authority, in Latvia it will be the FKTK. Therefore, the FKTK calls on potential crowdfunding service providers without delay to make themselves known to the FKTK presenting the planned activities," a statement from the FKTK said.

The single crowdfunding service framework is covered by the Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European crowdfunding service providers for business (Regulation). The Regulation has been applied from 10 November 2021, specifying the requirements for obtaining authorisation.

In Latvia, the draft law on crowdfunding services has been developed, determining the competent authority for the application of the Regulation in Latvia, its right to request supervisory information and other national supervisory matters. However, the above law remains to be approved and adopted by the Saeima.

"The FKTK calls on potential crowdfunding service providers without delay to make themselves known to the FKTK and present the planned activities, as well as to get advice on the requirements for obtaining authorisation of crowdfunding activities. By the date of entry into force of the draft law on crowdfunding services, the FKTK will assess the readiness of applications of potential crowdfunding service providers for obtaining authorisation," the regulator said.

Crowdfunding service providers operate digital platforms, bringing together investors and companies in need of financing and is increasingly used as an alternative way of raising funds for start-ups and small and medium-sized companies.

More information is available from FKTK at: www.fktk.lv

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