Prudential requirements and ratios
Under the Republic of Lithuania Law on Crowdfunding (hereinafter – Law), crowdfunding platform operators are subject to the following prudential requirements:
- A person that wishes to be included in the public list of crowdfunding platform operators or a crowdfunding platform operator must comply with at least one of the following criteria during the entire period of its activities:
- its equity capital must reach the minimum amount specified in Article 7(2) of the Law, or
- it must possess a surety bond issued by an insurance company or a document of suretyship or guaranty issued by a financial institution for the minimum amount of EUR 100,000 per one funder’s claim for compensation of losses and EUR 500,000 for all funder’s claims for compensation of losses per year.
- The equity capital of a crowdfunding platform operator organised as a public or private limited liability company, the structure of which is established in the Republic of Lithuania Law on Companies, may not be less than the larger of the following amounts:
- EUR 40,000;
- the equity capital requirement calculated pursuant to Article 7(3) of the Law.
- A crowdfunding platform operator must calculate the equity capital requirement at the end of each financial year. The equity capital requirement equals 0.2% of the amount granted as funding through the crowdfunding platform and not yet repaid to funders.
- If a crowdfunding platform operator that has a licence for the provision of other financial services issued by the supervisory authority, except for cases indicated in Article 7(4*) of the Law, provides the respective services and carries out its obligations in line with Article 7(1)(1) of the Law, its equity capital, calculated according to the requirements of legal acts regulating other licensed financial services, must not be less than the larger of the following amounts:
- EUR 40,000;
- the equity capital requirement calculated pursuant to Article 7(3) of the Law;
- capital requirements calculated according to the requirements of legal acts regulating other licensed financial services.
- The procedure for the provision of information and documents evidencing compliance with the requirements laid down in Article 7 of the Law is determined by the supervisory authority.
- The requirements laid down in Article 7 of the Law are not applicable to credit institutions or providers of investment services licensed in the Republic of Lithuania or in another Member State if they are licensed to provide brokerage services related to specific financing transactions and their prudential requirements laid down in Article 7 of the Law are assessed on the basis of legal acts governing the activities of such financial market participants; the requirements set thereby must not be lower than the ones provided for in the Law.