By the approval of Law Decree No. 179/2012, Italy has probably become the first country to introduce in its law system specific rules concerning the ‘crowdfunding’ phenomenon.

Crowdfunding is essentially the collection of money via internet from a potentially unlimited number of people who are interested in supporting a project (i.e. building a hospital; preserving natural resources; researching a cure against cancer).

Crowdfunders may participate in the project for its ethical value, for an economic investment, or both.

Contributions are generally small on an individual basis, but the promoter may reach an enormous amount in the aggregate. For example, President Obama has raised hundreds million dollars for his re-election campaign in this manner.
However, Art. 30 of the aforesaid Law Decree only deals with the crowdfunding supporting the growth of ‘innovative start-ups’, which, in case they meet the requirements set forth by the same Law Decree, may achieve corporate, labour and tax advantages.

The idea underlying Art. 30 is that innovative start-ups should seek venture capitals not only from major investors, but also offering their financial instruments online by means of a dedicated web portal.

The web portals can be obviously managed by investment companies and banks authorised to the related investment services according to the Italian Consolidated Law on Finance.

However, Part II of such Consolidated Law (‘Regulation of Intermediaries’) does not apply for investments lower than Euro 500 per order or 1,000 on an annual basis, as far as individuals are concerned, and Euro 5,000 per order and 10,000 on an annual basis with reference to juridical persons (see the Italian stock exchange commission – ‘Consob’ – resolution No. 18592/2013).

Art. 30 also establishes a specific register supervised by Consob for other entities which intend to manage web portals in a professional way. On the one hand, such entities are to comply with fewer rules than the financial traditional operators. However, on the other hand they (i) are obliged to transmit the investors’ orders to the aforementioned investment companies and banks; (ii) cannot hold money or financial instruments pertaining to third parties; and (iii) cannot conduct any financial advisory activity.

Aiming at protecting the investors, the web portals must have specific characteristics. In particular, non-professional investors shall not have access to the offers before filling in a questionnaire concerning the risks of their investments.
Finally, non-professional investors are entitled to withdraw from their orders within 7 days.


By: Giuseppe Serranò