The regulatory body of the Spanish stock market called the Spanish Securities Exchange Commission, or CNMV for short, has given clearance this week for two new platforms to operate locally as crowdfunding businesses – Crowdcube and MytripleA. These new permissions are based on Law to Promote Business Financing (5/2015 Promotion of Corporate Finance rules) which provided a unified legal framework for crowdfunding platforms and securitized funds, and made CNMV responsible for their creation, authorization and supervision. These rules stipulate that CNMV authorisation is necessary in order to operate as a participatory funding platform. At the same time, the CNMV is the regulatory body of the sector, and oversees the activity of all the platforms.
For Crowdcube this clearance is especially important in cross border terms as claims it is now the first platform to be internationally regulated in two countries – UK and Spain. This means that in the event of a Brexit, Crowdcube’s Barcelona based business would be in an ideal position to passport its products across the EU (excluding the UK).
Crowdcube Spain director Pepe Borrell said "we are very pleased with this new accreditation, because for the first time in history, Spanish start-ups and SMEs can benefit from a regulated market, where capital increase operations can be undertaken in an orderly way”.
This regulatory thumbs up comes at an important moment for Crowdcube – it’s just launched its latest funding round looking for over 5 million euros of new money. This is the largest round of investment in the history of the sector.
The CNMV has also authorized MytripleA as a ‘Platform for Participatory Financing’, the formal name for a crowdlending platform. Crucially MytripleA already benefits from what’s called a Payment Institution license (which can be passported within the EU) granted by the Bank of Spain, which authorizes MytripleA to make loan disbursements and receive loan instalments within the regulatory environment for banking payments. This is an additional regulatory requirement in Spain, which is not required by other European countries.
According to MyTripleA it is now the first and only crowdlending platform to have both of the required authorizations in Spain. It says that competitors entering Spain, will not be able to use the so-called passporting provisions from a financial regulator outside of Spain and will need to apply for a Platform for Participatory Financing license before being able to operate in compliance with Spanish regulations.
MytripleA provides loans to companies with funds raised from private and institutional investors. The platform started operations in April 2015 and since then has made loans to 143 Spanish SMEs for over 4 million euros of loan value. MytripleA has over a thousand registered investors who have earned an annual return of 7.6%.
According to Sergio Anton, CEO and co-founder of MytripleA, said: "Alternative financing is growing rapidly in Spain and we are very happy to have received the formal approval of CNMV. It is very important to continue offering our investors and companies the highest standards of quality and regulatory compliance. With this approval, we can continue our rapid expansion within the regulatory framework."
