October 3rd/2023.
On August 24th, the URF published a draft decree for comments, in which it seeks to modify specific rules applicable to crowdfunding platforms. The regulatory proposal aims to facilitate access to financing for SMEs (Small and Medium-sized Enterprises) and establish exit strategies for investors registered on crowdfunding platforms. The proposed approach includes: creating advertising mechanisms within crowdfunding platforms for the secondary trading of interests acquired on the platform; expanding the definition of resource recipient and productive project; clarifying which issuers must report information to credit bureaus; and enabling entities engaged in crowdfunding to use correspondents.
The proposal is based on an analysis of the current regulatory framework applicable to crowdfunding. The first modification is aimed at creating an exit mechanism for investments that wish to transfer their stakes. To achieve this, they will establish an “advertising space” where those interested in buying and selling crowdfunding interests in a secondary market can do so freely and independently of trading systems.
Regarding the qualifications required to be recipients of resources, the draft decree adds foreign companies that are involved in productive projects in Colombia as new recipients of resources. It also includes trusts, collective investment funds, and private equity funds (solely for receiving resources through the issuance of debt securities). The scope of the regulatory framework is further expanded with the definition of a productive project, which includes all projects “undertaken by legal entities, with or without profit motives, trusts, closed-end collective investment funds, and private equity funds, with the aim of generating economic returns through business, agricultural, industrial, commercial, or service activities.”
As for reporting to credit bureaus, the draft decree stipulates that the obligation to report information by companies engaged in crowdfunding activities should only apply to the debt securities issued by the recipients of resources.
Regarding the legal nature of projects, in the current context, it was limited to legal entities, whether for-profit or non-profit. Now, the goal is to expand the recipients of resources to trusts and closed-end collective investment vehicles, as well as private equity funds that aim to develop productive projects.
Lastly, the proposal aims to promote the use of correspondents so that more citizens can access crowdfunding as an investment mechanism. It’s important to highlight that crowdfunding companies cannot delegate activities related to KYC and onboarding. Regarding the use of correspondents, they will be governed by existing regulations in the field.