Crowdfunding has become more popular in recent years, and Switzerland has not been left out with respect to its expansion. Put in simple words, crowdfunding is a term to define collecting money from many sources to finance projects.
Typically a large number of investors, each of whom provide an amount (often quite small) to the project developer who publishes the project on a designated online crowdfunding platform. Potential investors interested in a project have the opportunity to support it through the platform. Thus, the crowdfunding platforms have a linking function between the investors and the project developers.
Swiss financial markets legislation is designed as a technologically neutral regulation. As a consequence, there are no specific rules for crowdfunding activities.
Depending on how business models concerning crowdfunding platforms are set-up, some parts of the procedure may be covered by financial market regulations and by private law provisions. Thus, participants of crowdfunding business models may be subject to license requirements and to the prospectus requirement. Participants of a crowdfunding business model (such as investors, crowdfunding platform providers, project developers, and escrow agents (if any)) need to verify separately if they require a license and if they are subject to the prospectus requirement before launchingtheir activities.