Investor Protection on Crowdfunding Platforms

The EU Crowdfunding Regulation, OUP

20 Pages Posted: 23 Nov 2021 Last revised: 20 Dec 2021

See all articles by Joseph Lee

Joseph Lee

School of Law, University of Manchester

Date Written: August 31, 2021


This paper discusses the protection of investors on crowdfunding platforms under the Crowdfunding Regulation. Although there are many provisions in the regulation that protect investors, this paper concentrates specifically on those included under the heading of Caper IV ‘Investor protection’ of the Crowdfunding Regulation.

This paper focuses on how investor protection can contribute to the objectives of crowdfunding and, in particular, how the provisions of the Crowdfunding Regulation serve this purpose. To this end, Section 2 discusses the investor-focused objectives of crowdfunding, and the role that technology can play in realising these objectives. Section 3 considers the meaning of investor protection within the scope of the Crowdfunding Regulation, and identifies areas where the current regime might be extended in the future. Section 4 discusses the categorisation of investors and the relevance thereof for the investor protection. Major provisions pertinent to investor protection are subsequently discussed in Sections 5 to 9, including the information to be provided to clients, default rate disclosure, the entry knowledge test and the simulation of ability to bear loss, the pre-contractual reflection period, and the key investment information sheet. The Sections also contain reflections pertinent to the different topics discussed in order to put them in a greater context. Section 10 concludes.

Keywords: EU crowdfunding regulation, CSPs, Investor protection, default credit disclosure, key investment information sheet

Suggested Citation

Lee, Joseph, Investor Protection on Crowdfunding Platforms (August 31, 2021). The EU Crowdfunding Regulation, OUP, Available at SSRN:

Joseph Lee (Contact Author)

School of Law, University of Manchester ( email )

Oxford Road
Manchester M13 9PL, M139PL
United Kingdom

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