SMV published the Regulation of the Financial Participative Financing Activity (crowdfunding) and its Management Companies
On May 19, 2021, Superintendent Resolution Nº 045-2021-SMV/02 was published, apdopting the Regulation of the Financial Participative Financing Activity and its Management Companies (the “Regulation“), which clarifies the provisions of Emergency Decree Nº 013-2020 – Emergency Decree that Promotes the Financing of MSMEs, Entrepreneurships and Startups. It includes provisions on (A) the scope of Financial Participative Financing (“FPF“, also known ascrowdfunding); (B) the procedure for the authorization of the organization and operation of a Financial Participative Financing Platform Management Company (“SAPFPF“), as well as its powers and obligations; (C) the specific regulation of FPF projects; and (D) the scope of supervision of the SMV.
(A)Scope of the FPF
The Regulation defines the FPF activity as “one in which, through a platform managed by a Management Company, recipients who request financing for a personal and/or business project are put in contact with investors who seek a financial return for the resources they provide“.
FPF may be implemented through the following modalities: (i)FPF of securities, whereby investors finance the project in exchange for the issuance ofequity or debt securities; and (ii)FPF of loans, whereby investorsfinance the project through a loan, which may be materialized through a financial instrument or other security issued by the recipient. Both modalities must necessarily be done through the platforms managed by the SAPFPF.
Excluded from the scope of the regulation on FPF are platforms intended to (i) finance investment of projects in which no financial return is expected; (ii) contacting a single claimant with a single investor or making financing from SAPFPF’s own resources; and (iii) discount operations of bills of exchange orfactoringoperations with investors who acquire part of any credit right of the undertaking that the recipient has in its favor, but without said right deriving from loans, credits or loans granted in favor of the recipient.
(B)SAPFPFs and its authorization
- The most important aspects ofauthorizations for the organization and operation of the SAPFPFare the following:
(i)Competent authority: Authorizations for organization and operation are requested before the SMV. If FPF of loans are requested, the SMV shall require the prior opinion of the SBS to authorize the operation of the SAPFPF.
(ii)Corporate form and purpose: SAPFPF must be corporations and must have as their exclusive corporate purpose the administration of platforms for FPF.
(iii)Organizers: Both legal entities and individuals may be shareholders of a SAPFPF and request authorization as organizers. The SAPFPF must have at least two shareholders.
The organizers must submit information on their economic group, identifying those who have direct and indirect ownership of more than 10% of its capital stock and including their financial information, among others.
(iv)Impediments or requirements applicable to shareholders, directors or managers: Shareholders and related persons shall not be subject to the impediments common to entities regulated by the SMV. The managers of the SAPFPF shall have relevant professional experience of at least two (2) years.
(v)Term and validity: The SMV must rule on each request for authorization (organization and operation) within thirty (30) working days, which term is subject to suspension due to correction of observations.
The organizational authorization shall be valid for one (1) year from the date on which the organizers are notified. The application for operating authorization shall be submitted within that period together with the relevant information from the SAPFPF already established as set out in the Regulation.
(vi)Scope: The authorization shall only operate for the type of FPF requested. The SAPFPF may request an authorization to incorporate the other FPF modality at a time after its original authorization.
(vii)Minimum capital and equity to operate: The minimum capital stock to operate shall be equal to or greater than S/.300,000.00, fully subscribed and paid in cash. This value shall be constant and shall be updated annually according to the National Wholesale Price Index, based on such index the number published for the month of January 2021.
The net worth of the SAPFPF may not be below the minimum capital, except for the first 24 months after obtaining the authorization to operate. However, during this period, its equity may not be less than 70% of the indicated amount during the first year and 80% during the second year.
- Other obligations applicable to the SAPFPF, once the operating authorization has been obtained, include:
i) Implement a data protection policy for recipients, investors and the projects it manages.
(ii) Establish an internal control system, as well as policies and guidelines for comprehensive risk management and money laundering prevention.
(iii) Submit to the SMV the necessary periodic information in a timely manner, as well as the information required by the SMV, related to its activities.
(iv) Participate as an investor in projects published on its own platform, in which case certain limits to the amount invested and a subordination criterion with respect to the payment of other investors shall apply.
(v) Segregate the accounts in which its own resources are channeled from those that have resources from recipients and investors.
(vi) Comply with the regulations for the prevention of money laundering and terrorist financing.
Transfers of SAPFPF shares that allow persons other than the organizers to directly or indirectly exceed 10% of its capital stock, as well as any act of encumbrance, fiduciary transfer or others that directly or indirectly involve more than 10% of the capital stock and grant a third party the right to vote, require authorization from the SMV.
This does not apply to transfers between companies of the same economic group of the SAPFPF that do not involve a change in the decision-making and control unit, which must be reported to the SM.
FPF projects must follow the following guidelines:
(i) The project must be carried out entirely in Peruvian territory. The resources collected by the recipients may not be used to finance third parties, or to grant credits or loans.
(ii) Recipients may request financing on their own behalf through two types of projects:
a. Business project, in the case of individuals or legal entities seeking to finance operations, ventures or business ideas; and
b. Personal project, only for individuals seeking to finance personal, family or consumer expenses.
(iii) Projects to be financed must comply with the following financing and participation limits:
a. Project Amount: Personal projects may not exceed the sum of 50 UIT Tax Units and a maximum financing term of 3 years, while business projects may not exceed 500 UIT Tax Units.
b. Amount received by recipients: Recipients may not receive through an FPF an amount greater than 100 UIT in the case of an individual and 750 UIT in the case of a legal entity. Successive rounds of FPFs are allowed and must not exceed these limits within the previous 12 months.
c. Institutional investors (as defined in the Institutional Investors Market Regulations) may not be the sole investors in a particular project, and SAPFPF is obliged to ensure a plurality of investors. The limits set forth in paragraph d. below do not apply to these investors.
d. Non-institutional investors shall not invest more than 20% of the total amount of a project and shall only invest a maximum of 20% of their annual income or of their total assests within a 12-month period, whichever is greater.
(iv) FPF of loans may be issued for both personal and corporate projects. FPF of securities may only be issued for business projects.
(v) The maximum term for projects is 90 calendar days, after which they may be extended for additional 90-day periods, subject to evaluation by the SAPFPF.
(vi) The recipients of financing shall accept investment commitments in excess of the target amount by up to 10%, provided that this has been disclosed prior to the publication of the project and the use that shall be given to these additional resources has been described.
(vii) Investors who wish to participate in the FPF activity must be registered by the SAPFPF for identification and submit an affidavit stating their knowledge of the operation and risk involved in the FPF activity.
(D)Scope of Supervision
(i) The SMV supervises the SAPFPF.
(ii) Recipients and FPF projects, as well as the truthfulness or integrity of the information provided by them, are not under the supervision of the SMV. Securities or loans associated with FPF projects are not subject to registration with the SMV.
(iii) The SMV is not competent to resolve claims or complaints from recipients or investors of FPF projects.
If you have more doubts about this process or you are interested in exploring the incorporation of one of these entities, please contact us.
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