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13 Eur. Company L. 56 (2016)
The Regulation of Crowdfunding in the German Small Investor Protection Act: Content, Consequences, Critique, Suggestions

handle is hein.kluwer/eurcompl0013 and id is 52 raw text is: ARIICLL The Regulation of Crowdfunding in the German Small Investor Protection Act: Content, Consequences, Critique, Suggestions LARS KLOHN, LARS HORNUF EtTOBIAS SCHILLING* 1. THE GERMAN CROWDFUNDING AND CROWDINVESTING MARKET (crowdfunding and crowdinvesting).3 If the German Bundesrat (Federal Council)4 approves the act - which is assumed to be the The promise of the Grand Coalition of the current German case - it will enter into force in the coming weeks.' The first government to create a 'reliable legal framework' for 'new forms of Discussion Draft6 and the Draft Act of the German Federal financing such as crowdfunding is, supposedly, poised to be Government, which successively had been circulated since July fulfilled. On 23 April 2015, the German Bundestag (Federal 2014, have engendered criticism not only from the part of the Parliament) passed the Small Investor Protection Act German crowdinvesting industry,8 but also from academic (Kleinanlegerschutzgesetz) in its second and third reading,2 which literature.9 The Finance Committee of the Bundestag for the first time contains regulation specifically for project and (Finanzausschuss) has engaged in an attempt to address these company financing through specialized Internet platforms concerns in a last-minute recommendation,0 which resulted in the Prof. Dr iur. Lars Klohn, LL.M. (Harvard), Munich/Jun. Prof. Dr oec. publ., Lars Hornuf, M.A. (Essex), Trier/Ass. ur. & Tobias Schilling, Maitre en droit (Aix-Marseille), Munich. The authors Klohn and Hornuf are leading a research project on the regulation of crowdinvesting sponsored by the German Research Foundation (Deutsche Forschungsgerneinschaft - DFG). The author Schilling is a research associate in this project. A previous version of this article, which dealt with the draft of the present Small Investor Protection Act, published on 20 Nov. 2014 by the German government, appeared in German (Klhn/Hornuf Der Betrieb 2015, 47 53). This is why most references in the footnotes are made to German literature. 1 Deutschlands Zukunft gestalten, Koalitionsvertrag zwischen CDU, CSU und SPD (= Forming the Future of Germany, Coalition Agreement between the CDU CSU and SPD), 18th session, p. 22, http://www.bundesregierung.de/Content/DE/_Anlagen/2013/2013 12 17 koalitionsvertrag.pdf (accessed 23 May 2015). 2 Draft Act of the German Federal Government, Draft of a Small Investor Protection Act, BT-Drs. 18/3994 (http://dip21.bundestag.de/dip21/btd/18/039/1803994.pdf), in the amended version of the Finance Committee, BT-Drs. 18/4708, http://dip21.bundestag.de/dip21/btd/18/047/1804708.pdf (accessed 23 May 2015), see BT Plenarprotokoll (session report) 18/100, p. 9250B. The act amends no less than twelve existing statutes and regulations governing investment and financial services but does not create a new, stand alone statute. 3 In established usage, the concept of crowdfunding means collecting financial contributions from a multitude of persons to achieve a common goal through the use of a specialized Internet platform. This need not be investment to finance a company. Crowdinvesting, in the German (legal) terminology, is seen as a subcategory of crowdfunding and designates the financing of a company through the use of a specialized Internet platform, typically by issuance of investment shares that are not securitized; cf. Klohn/Hornuf Zeitschrift ffir Bankrecht und Bankwirtschaft 2012, 237, 239; see also Baumann, Crowdinvesting im Finanzmarktrecht, 2014, p. 9ff. 4 See BR Drs. 226/15. 5 In contrast to the classification implied by the imprecise terminology of some authors, the Small Investor Protection Act does not require the consent of the German Bundesrat since it is classified as an objection bill. However, the German Bundesrat can demand that the Mediation Committee (a committee for joint consideration of bills) be convened within three weeks after receiving the adopted bill (Art. 77 para. 2 Basic Law (GG)). A potential objection entered by the Bundesrat which is not likely in the present case - can be overturned by the Bundestag (Art. 77 paras 3, 4 Basic Law (GG)). 6 Discussion Draft of the German Federal Government, Draft of a Small Investor Protection Act (as of 28 Jul. 2014, 18:15 o'clock), http://www.bundesfinanzministerium.de/Content /DE/Downloads/Gesetze/2014 07 28 kleinanlegerschutzgesetz.pdf (accessed 23 May 2015); see Nietsch/Eberle, Der Betrieb 2014, 2575, Nastold, Zeitschrift fMr Vertriebsrecht (ZVer triebsR) 6/2014, 366; for a brief overview on the Draft Small Investor Protection Act in general see also Jesch/Sie nko, Betriebs-Berater 2014, 2570. 7 Draft Act of the German Federal Government, Draft of a Small Investor Protection Act, BT-Drs. 18/3994; see Klohn/Hornuf Der Betrieb 2015, 47. 8 Statement of the German Crowdfunding Network (GCN) of the German Crowdsourcing Trade Association on the administration's Discussion Draft of a Small Investor Protection Act (as of I Aug. 2014), http://www.germancrowdfunding.net/wp content/uploads/2014/08/20140818_Stellungnahme GCNKleinanlegerschutzgesetz.Gesamt.pdf Bitcom, Statement on the Discussion Draft of a Small Investor Protection Act (1 Sep. 2014), http://www.bitkom.org/files/documents/BITKOM StellungnahmeReferentenentwurf Kleinanlegerschutzgesetz-final.pdf (accessed 23 May 2015). 9 Klohn/Hornuf Der Betrieb 2015, 47. 10 Recommended resolution and report of the Finance Committee (7. Committee) on the Draft Act of the German Federal Government Drucksache 18/3994 Draft of a Small Investor Protection Act, BT Drs. 18/4708. Klohn, Lars; Hornuf, Lars & Schilling, Tobias. 'The Regulation of Crowdfunding in the German Small Investor Protection Act: Content, Consequences, Critique, Suggestions' European Company Law 13, no. 2 (2016): 56-66. @ 2016 Kluwer Law International BV, The Netherlands

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