Should Crowdfunding be Regulated in Sweden?

Crowdfunding seems to be on everyone’s lips. Surprised? During 2014, the global crowdfunding market impressively injected 16 billion USD into different projects – making it hard for governments to turn a blind eye on the phenomena. FundedByMe grew more than 640% in Q1 and Q2 2015 vs. Q1 and Q2 2014 and the client base has increased to more than 55,000 active members.

For 2015, the global crowdfunding market is projected to double and FundedByMe especially sees a big growth in Asia. Don’t believe the myth that there’s tons of funding out there, especially to those who would like to become business angels with small sums (although the average investment on FundedByMe is €5,800 thus not so small amounts are invested).

The Swedish market is maturing and the governmental ruled Swedish Financial Supervisory Authority has started to implement information about crowdfunding as a natural part of their reports (page 15). Also, they have now scheduled a meeting to analyse the benefits and risks of crowdfunding on the Swedish market, read about it in SvD here . The Minister of Financial Markets, Per Bolund (MP), expressed his interest and belief in the market by saying that regulations need to be implemented, helping the market to grow even further. In addition, he recognises the need and therefore the huge demand for these types of financial services, enabling funding in a way that the traditional funding market can’t today. Also, Robin Teigland, researcher in crowdfunding at Stockholm School of Economics, claims that the distrust towards the traditional bank sector is growing – acknowledging the benefits of Crowdfunding to an even larger extent.

Today, the regulations for Equity and Loan based crowdfunding are severe due to distribution regulations and the Limited Companies Act (Aktiebolagslagen) and thus Sweden is very monitored. FundedByMe has been complying to the Companies Act since it’s inception and us also already registered by Finansinspektionen for it’s crowd-lending branch. However, FundedByMe couldn’t be happier about the news, since it proves the seriosity of the market which the company has strived for since the start in 2011. Bringing the topic to a political level recognises FundedByMe and other players on the market as well as it helps people to use the service more effectively. Even though nothing is legislated yet, it’s being talked about which FundedByMe thinks is a step towards a market expansion and development!

What do you think? Should crowdfunding in Sweden be regulated and should equity crowdfunding and crowd lending, already regulated by the Companies Act (Aktiebolagslagen) be regulated?

6 thoughts on “Should Crowdfunding be Regulated in Sweden?

  • July 30, 2015 at 15:52
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    If it aint broken, don’t leave MP to try and fix it.

    Reply
  • July 30, 2015 at 18:30
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    why and how it is supposed that it be regulated ? authorities usually regulate things the wrong way sometimes, I think. great to see crowdfounding grows in such a pace.

    Reply
  • July 30, 2015 at 18:33
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    Why do you want to tax your customers? If so, a lot of the money people give would end up in the Swedish government. Is that what the people sending money want? I don’t want to give money to the Swedish government.

    Reply
  • July 31, 2015 at 11:54
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    “Should crowdfunding in Sweden be regulated and should equity
    crowdfunding and crowd lending, already regulated by the Companies Act
    (Aktiebolagslagen) be regulated?”

    First question: No. There should be fewer restrictions on any sort of trade. If you want a particular restriction, do it when you establish a contract with the participants in a crowdfunding expedition.

    Second question: If it’s already regulated, then it already is regulated.

    But, it could be more or less regulated. The less regulation the better. Again, if you want a regulation, make a better contract.

    Reply
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