Article 1
Maintenance and operation of internal rules to prevent conflicts of interest
1. Crowdfunding service providers shall establish in writing, and implement and maintain, internal rules to prevent conflicts of interest. The rules to prevent conflicts of interest shall be appropriate to the size and organisation of the crowdfunding service provider, as well as the nature, scale and complexity of its business.
2. Where a crowdfunding service provider is a member of a group, the internal rules to prevent conflicts of interest referred to in paragraph 1 shall take into account any circumstances that constitute or may give rise to a conflict of interest due to the structure and business activities of other members of the group.
3. The internal rules to prevent conflicts of interest referred to in paragraph 1 shall require the crowdfunding service provider to:
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(a) |
ensure that any of the persons referred to in Article 8(2), first subparagraph, points (a), (b) and (c) of Regulation (EU) 2020/1503 are not accepted as project owners in the crowdfunding projects offered on their crowdfunding platform; |
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(b) |
identify whether any of the persons referred to in Article 8(2), first subparagraph, points (a), (b) and (c), of Regulation (EU) 2020/1503 have been accepted as investors in the crowdfunding projects offered on their crowdfunding platform; |
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(c) |
identify any other circumstances which may give rise to an actual or potential conflict of interest between the persons referred to in Article 8(4) of Regulation (EU) 2020/1503, while taking into account the size and activities of the crowdfunding service provider and, where applicable, of the group to which it belongs, and the risk of damage to the interests of clients; |
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(d) |
where relevant, specify procedures to be followed and measures to be adopted, including procedures and measures concerning the relevant internal responsibilities within the organisation of the crowdfunding service provider, to comply with the requirements laid down in Article 8(2) of Regulation (EU) 2020/1503 and pursuant to point (c) of this paragraph. |
4. In the situation referred to in paragraph 3, point (b), persons as referred to in Article 8(4) of Regulation (EU) 2020/1503 that are engaged in different business activities involving a conflict of interest of the kind specified in Article 8(2), first subparagraph, points (a), (b) and (c), of Regulation (EU) 2020/1503 shall carry on those activities at a level of independence appropriate to:
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(a) |
the size and activities of the crowdfunding service provider; |
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(b) |
where applicable, the size and activities of the group to which the crowdfunding service provider belongs; |
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(c) |
to the risk of damage to the interests of clients. |
5. In the situation referred to in paragraph 3, point (c), internal rules shall consist all of the following:
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(a) |
effective procedures to prevent or control the exchange of information between persons as referred to in Article 8(4) of Regulation (EU) 2020/1503 that are engaged in activities involving a risk of a conflict of interest where the exchange of that information may harm the interests of one or more clients of the crowdfunding service provider; |
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(b) |
provisions for separate supervision of persons as referred to in Article 8(4) of Regulation (EU) 2020/1503 whose principal functions involve carrying out activities on behalf of, or providing services to clients whose interests may conflict, or who otherwise represent different interests that may conflict, including the interests of the crowdfunding service provider; |
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(c) |
removal of any direct link between the remuneration of persons as referred to in Article 8(4) of Regulation (EU) 2020/1503 that are principally engaged in one activity and the remuneration of, or revenues generated by, different persons, as referred in article 8(4) of Regulation (EU) 2020/1503, principally engaged in another activity, where a conflict of interest may arise in relation to those activities; |
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(d) |
measures to prevent or limit any person from exercising inappropriate influence over the way in which a person as referred to in Article 8(4) of Regulation (EU) 2020/1503 carries out crowdfunding services; |
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(e) |
measures to prevent or control the simultaneous or sequential involvement of a person as referred to in Article 8(4) of Regulation (EU) 2020/1503 in separate crowdfunding services where such involvement may impair the proper management of conflicts of interest. |
6. Crowdfunding service providers shall assess and review their internal rules to prevent conflicts of interest at least annually and shall take all appropriate measures to address any deficiencies identified.