The regulation on European Crowdfunding Service Providers, better known as ECSP, represents a set of regulations implemented by the European Union, laying down uniform rules to regulate crowdfunding platforms.

Such regulations aim to provide a harmonised framework for crowdfunding across the EU, making it easier for new crowdfunding platforms to enter the market and increasing investors protection.

Like all other crowdfunding companies, October must ensure its ECSP compliance by November 2023, and here you'll get the chance to understand the impact of such changes within our retail lenders community.

Some of the following implementations have already been launched in production, and all of them will be carried out by the requested deadline (November 6th 2023). All these changes had to undergo strict reviews and approval by the French Prudential Supervision and Resolution Authority (ACPR) to ensure their conformity with the EU requirements.

To ensure lenders safety and awareness, October will implement a few additional layers of protection on our lenders' onboarding and lending processes, such as some new questions on the investors test all lenders must complete when investing on the October platform. With the new regulation, this quiz will be valid for 2 years and will then be requested again to refresh lending knowledge.

Together with the new version of our knowledge test, a net worth calculation and a loss simulator will be included in lenders' onboarding processes as well as on their October accounts, for these to be repeated once a year. This tool will simulate lenders' ability to bear losses based on their income, and its main scope is to raise awareness on lending capacity and trigger warning alerts when reaching set investment limits. Net worth information will only be used for triggering risk warnings, as described in the following paragraph.

With the implementation of a net worth calculator, October will also ensure that a risk warning gets triggered every time a lender requests to invest an amount greater than:

These warnings will give lenders the chance to continue or not by requesting their express acknowledgment of the potential risks.

Pursuant to the ECSP regulation, our retail lenders will have the possibility to request to be treated as Sophisticated Investors.

This new category will be available for those lenders meeting certain financial criteria, which will be assessed through a specific template any lender willing to become a Sophisticated one can request to the October team.

As sophisticated lenders, the previously mentioned layers of protection would be removed and not taken into account, as long as lenders maintain such status.

This need for transparency and efficiency will also affect potential borrowers resorting to October for their investment requests: companies will be required to fill out a specific form ("Key Investment Information Sheet"). KIIS documents must be available for each project on every crowdfunding platform, for you to compare projects between platforms.

To ensure transparency within our community, both our credit and pricing policies have been published on the October website. These will give our lenders a better understanding of how we select projects and how we determine the related loan conditions and pricing. You may find them at the following links:

Even if we value the fact that October’s employees are lending on the platform like retail lenders, as we see that as an alignment of interest, this will no longer be possible with the new regulation. October employees will no longer be able to lend on any project as retail lenders themselves, but will only get the chance to do so through the October Funds.

With two of our main goals being an informed community and a clear and transparent environment, any further implementation will always be shared and this tutorial updated accordingly. In case of major changes or important news our team will also inform you on separate channels.