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Digital markets, funding and payment services

As a preliminary remark, a fintech project may fall within the scope of the AIFM Directive if the relevant entity raises capital from a number of investors, with a view to investing it in accordance with a defined investment policy for the benefit of those investors, and is not a UCITS. The requirements are quite burdensome and fintech projects do not generally aim to fall into the definition of 'alternative investment funds'. The French legal framework relating to, in particular, the banking monopoly and the scope of the public offer of securities, has recently been modified to allow crowdfunding activities.

i Crowdfunding

In France, to foster the development of crowdfunding in a secure environment for contributors (lenders, investors or donors), the public authorities have amended the regulations and created two new 'light' regulatory statuses for crowdfunding platforms: crowdfunding adviser and crowdfunding intermediary.

ii Crowdfunding adviser

A platform for crowdfunding via the subscription of financial securities issued by an unlisted company must be registered in the ORIAS register (i.e., a register for financial intermediaries, including insurance intermediaries, intermediaries in banking transactions, etc.) as a crowdfunding adviser (CIP). Their activities consist of providing investment advice, as their regular activity, on plain vanilla capital and debt securities (ordinary shares, fixed rate bonds and convertible bonds). The activities must be conducted by means of a progressive-access website, fulfilling the characteristics laid down by the AMF. In order to benefit from the exemption to the publication of a prospectus, the amount issued shall not exceed €2.5 million.

Such a platform may also opt for the status of investment services provider (ISP) providing investment advice services, in which case it must be licensed by the ACPR. Such platforms are regulated by the AMF alone in the case of CIPs and by the AMF and the ACPR jointly for ISPs.

iii Crowdfunding intermediary

If the website proposes to fund projects under the form of a loan with or without interest, the platform must be registered in the ORIAS register as a crowdfunding intermediary (IFP). We will focus in the rest of this paragraph on the intermediation of loans stipulated with or without interest, and granted to professionals (i.e., individuals acting in a professional capacity or commercial companies) by individuals not acting for professional purposes. With a view to protecting lenders, the amount lent shall not exceed €2,000 per lender and per project where the loan is granted with interest and €5,000 where no interest is stipulated. The total amount borrowed shall not exceed €1 million.

IFPs are regulated by the ACPR.

According to publicly available statistics, France has around 100 crowdfunding platforms and is now the second largest crowdfunding market in Europe. Market consolidation is expected as a result of strong competition between the platforms.

iv Payment services

Since the implementation into French law in 2018 of EU Directive 2015/2366 on payment services in the internal market (PSD 2), two new payments services are now available: payment initiation and account information services.