Bank of Lithuania

Crowdfunding service providers

‘Crowdfunding service provider’ means a legal entity that provides crowdfunding services, i.e. matches the business financing interests of investors and project owners using a crowdfunding platform.  

Crowdfunding service providers and licensing procedures are governed by the Crowdfunding Regulation.

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Requirements for obtaining a crowdfunding service provider’s licence

A legal entity that intends to provide crowdfunding services must apply to the Bank of Lithuania for a crowdfunding service provider’s licence.

The requirements for the activities of crowdfunding service providers are set out in the Crowdfunding Regulation, further specified in the draft regulatory technical standards published by the European Securities and Markets Authority (ESMA).

An application for authorisation as a crowdfunding service provider shall contain all the elements set out in Article 12(2) of the Crowdfunding Regulation.

The standard application form is set out in the draft regulatory technical standards published by ESMA (see APPLICATION FOR AUTHORISATION AS CROWDFUNDING SERVICE PROVIDER).

Requirements:

  • A programme of operations setting out the types of crowdfunding services that the prospective crowdfunding service provider intends to provide and the crowdfunding platform that it intends to operate, including where and how crowdfunding offers are to be marketed;
  • The applicant must confirm how its crowdfunding services will be provided with payment services;
  • The applicant must have drawn up contractual descriptions of the governance arrangements and internal control mechanisms to ensure compliance with this Regulation, including risk-management and accounting procedures;
  • The applicant must have a description of the prospective crowdfunding service provider’s systems, resources and procedures for the control and safeguarding of the data processing systems, and a description of operational risks;
  • The applicant must have prepared a description of the prudential safeguards and provide evidence that it will comply with these measures;
  • The applicant must have a description of the procedures to verify the completeness and clarity of the information contained in the key investment information sheet;
  • The applicant must have a description of the procedures relating to investment restrictions for unexperienced investors;
  • The applicant shall have a description of the business continuity plan in place which, taking into account the nature, scale and complexity of crowdfunding services to be provided by the applicant, sets out measures and procedures to ensure that critical services related to existing investments continue to be provided in the event of the applicant’s default and that the arrangements between the applicant and its clients are properly managed;
  • The applicant must provide information on the persons responsible for the management of the applicant and evidence that these persons are of good repute and possess appropriate knowledge, skills and experience;
  • The applicant must provide basic information on its shareholders holding 20 % or more of the applicant’s authorised capital and/or voting rights and evidence that these persons are of good repute;
  • The applicant has drawn up an appropriate description of the internal rules preventing the applicant’s shareholders, managers, employees or natural or legal persons controlled by those persons, as project owners, from using crowdfunding services offered by the applicant;
  • The applicant must have a description of the procedures for handling customer complaints.

The documents submitted to the Bank of Lithuania shall substantiate the applicant’s compliance with the requirements set out in the Crowdfunding Regulation and its readiness to provide crowdfunding services.


Requirements for relicensed crowdfunding service operators

On 10 November 2022, crowdfunding platform operators included in the public list of crowdfunding platform operators maintained by the Bank of Lithuania will no longer have the right to provide crowdfunding services, or authorised to provide the possibility to enter into new financing transactions through the crowdfunding platform they administer; furthermore, such operators will be obliged to continue fulfilling their commitments to financiers and project owners, unless the obligations of the crowdfunding platform operator are transferred to other persons in accordance with the procedure laid down by law. Crowdfunding platform operators included in the public list of crowdfunding platform operators of the Bank of Lithuania intending to provide crowdfunding services in accordance with the Crowdfunding Regulation shall, from 1 January 2022, but no later than 9 November 2022, provide the Bank of Lithuania with the documents, data and/or information referred to in Article 12(1) to (3) of the Crowdfunding Regulation, unless these documents, data and/or information have already been submitted to the Bank of Lithuania after they have been assessed as compliant with the requirements of the Crowdfunding Regulation.

Having analysed the need for the documents, data and/or information referred to in Article 12(1) to (3) of the Crowdfunding Regulation, the Bank of Lithuania has developed the guidelines (246.6 KB download icon) on simplified requirements for relicensable crowdfunding platform operators. With a view to ensuring efficiency of the re-licensing process, crowdfunding platform operators planning to provide crowdfunding services under the Crowdfunding Regulation are invited to apply immediately for a crowdfunding service provider’s licence and withdraw from the list of public crowdfunding platform operators maintained by the Bank of Lithuania in accordance with the above guidelines.

The documents submitted to the Bank of Lithuania shall substantiate the applicant’s compliance with the requirements set out in the Crowdfunding Regulation and its readiness to provide crowdfunding services.


Assessment of submitted documents:

The submitted documents are evaluated by specialists from the relevant divisions of the Bank of Lithuania within the limits of their competence, who form a general opinion and conclusions on the issue of a licence. In the event of deficiencies in the application, the responsible professionals may apply to the applicant for correction. 

The duration of the assessment of the documents depends on the scope and quality of the application. 

Regular communication and appropriate meetings with the applicant shall take place throughout the evaluation period. Applicants can communicate directly with the specialists of the Bank of Lithuania assessing the submitted documents. The Bank of Lithuania is ready to provide all information related to the licensing process, to inform about the progress of the process and develop cooperative relations between the Bank of Lithuania and financial market participants both during and after the licensing process.


Time limits for the issue of a licence laid down in the Regulation

Within 25 working days of receipt of the application, the Bank of Lithuania shall assess whether the application is complete by verifying that all the information required has been submitted. If the application is incomplete, the Bank of Lithuania may set a deadline by which the applicant must submit the missing information. If the application is not supplemented with the missing information after the expiry of the deadline, the Bank of Lithuania may refuse to review the application and return the submitted documents to the applicant. 

Within three months of receipt of a complete application, the Bank of Lithuania shall assess whether the applicant complies with the requirements set out in the Crowdfunding Regulation and shall take a fully reasoned decision to grant or refuse to grant a licence to the crowdfunding service provider if the applicant does not comply with the requirements of the Crowdfunding Regulation, and if the applicant’s management body could jeopardise its effective, sound and prudent management and business continuity, or its ability to pay sufficient attention to the interests of its clients or market integrity.


Requirements for crowdfunding service providers wishing to provide services in other Member States of the European Union

In order to provide services in another Member State of the European Union (EU), a crowdfunding service provider holding a licence issued by the Bank of Lithuania must provide the following information to the Bank of Lithuania:

  • a list of the Member States in which the crowdfunding service provider has notified its intention to provide crowdfunding services, and specific services intended to be provided in those Member States and covered by the Crowdfunding Regulation;
  • identity data of natural and legal persons responsible for the provision of crowdfunding services in those Member States;
  • the starting date of the intended provision of the crowdfunding services by the crowdfunding service provider;
  • a list of any other activities provided by the crowdfunding service provider not covered by the Crowdfunding Regulation.

Upon receipt of this information, the Bank of Lithuania shall transmit it to the competent authority of the Member State in which the crowdfunding service provider intends to provide crowdfunding services, and to ESMA and shall immediately inform the crowdfunding service provider thereof.

A crowdfunding service provider may start providing crowdfunding services in another EU Member State upon receipt of a notification from the Bank of Lithuania that Member State and ESMA have been informed of such intentions of the crowdfunding service provider, or 15 calendar days after the notification of the information to the Bank of Lithuania.


Legislation governing the activities and licensing of crowdfunding service providers

 

1 – Lithuanian consolidated version valid as of 1 March–30 June 2017. English version last amended on 12 March 2015.

2 – Lithuanian consolidated version valid as of 1 November 2016. English version last amended on 14 October 2014.

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Last update: 28-01-2022