The new regulation will also strengthen investor protection. First of all, real estate crowdfunding project owners will be required to provide precise information to the investor regarding the crowdfunding offer. In addition, Investors will also have to demonstrate that they have the ability to face potential losses by completing a suitability and appropriateness test.
The regulation will cover and be applicable to every EU real estate crowdfunding platform raising up to 5 million euros, calculated over a period of 12 months.
Regulation (EU) 2020/1503 came into force on 10th November 2020, and will be applicable from 10th November 2021.