The Regulation of Crowdinvesting Under the Greek Securities Laws

Abstract

Due to the ongoing financial crisis in Greece, which has vastly affected the Greek banking system and consequently the financing opportunities of domestic entrepreneurs and companies, the Greek legislator, in close cooperation with other public entities, namely the Hellenic Capital Markets Committee (“HCMC”) and the Bank of Greece, has strived to find alternative financing solutions which would serve both as a “lifejacket” and mainly as an impetus for Greek entrepreneurship. Following a suggestion from the HCMC and after a public consultation, which took place with production and social institutions, the Greek Parliament voted for the 4416/2016 law on September 1st 2016 which was entered into force a week later. This legislation mainly focused on incorporating the EU Directive 2014/91, since 17 out of 29 articles amend the Greek law 4099/2012 which incorporated the previous EU Directive 2009/65. Apart from these provisions, however, this law also includes two more articles (article 23 and article 24) which amended 3401/2005 (“The Greek Prospectus Act”) and 3606/2007 (“Markets in Financial Instruments Act”) legislations respectively. These two articles are in fact the cornerstone of the Greek crowdinvesting regulation. This Article examines the regulatory framework of crowdfunding in Greece, especially after the adoption of the aforementioned specific provisions regarding the public offer of securities through crowdfunding platforms. More specifically, it aims to provide a general description of the newly adopted crowdfunding regulation and to investigate its probable effect to the boost of the inexistent crowdinvesting market in Greece. Moreover, in the context of legal analysis of the new regulation, some inconsistencies which might lead to opposite results than the desired ones are pointed out and some modifications which are deemed necessary in order for the crowdfunding market in Greece to become a valuable tool for growth and not turn into a “market for lemons” are suggested. The legal analysis follows a comparative approach since it takes into consideration similar provisions and practices in other EU countries and the USA.