Crowd-funding: An Infant Industry Growing Fast – Staff Working Paper of the IOSCO Research Department. Eleanor Kirby and Shane Worner, February 2014

“Crowd-funding is an umbrella term describing the use of small amounts of money, obtained from a large number of individuals or organisations, to fund a project, a business or personal loan, and other needs through an online web-based platform. Peer-to-peer lending is a form of crowd-funding used to fund loans which are paid back with interest. Equity crowd-funding is the raising of capital through the issuance of stock to a number of individual investors using the same method as crowd-funding. Peer-to-peer lending and equity crowd-funding platforms are of particular interest to IOSCO and its members because they are growing rapidly and are accessible easily to both retail and sophisticated investors alike. Various IOSCO members have recently published or are in the process of publishing guidelines, policies or reviews on developments in their jurisdictions. Peer-to-peer lending and equity crowd-funding have also drawn the attention of governments who wish to encourage the growth of small and medium enterprises (SMEs), which has led some governments to actively seek to lend money through these platforms, or implement regulatory changes through the use of exemptions or regulation reviews of these markets.”