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Appendix 2: Additional Terms for Crowdfunding Platforms

C 7/2020 Effective from 14/11/2020
  1. 2.The following terms must be included in a Client Agreement between a crowdfunding company and a Lender:
  1. the crowdfunding company’s obligations to administer the loan, including:
    1. how payments made by the Borrower will be transferred to the Lender
    2. steps that will be taken if payments by a Borrower are overdue or the Borrower is in default; and
    3. Clear guidelines on what is considered to be a default 
  2. if the Lender is a Market Counterparty, the steps that will be taken by the CFP and Lender to ensure that the Lender complies with any applicable limits relating to the amounts of loans that may be made using the platform;
  3. the contingency arrangements that the crowdfunding company will put in place to deal with a platform failure or if the CFP ceases to carry on its business.
  1. 3.The following terms must be included in a Client Agreement between a crowdfunding company and a Borrower:
  1. a restriction on the Borrower using any other Crowdfunding service to raise funds during the commitment period;
  2. a restriction on the Borrower or any Person that is connected to the Borrower, lending or financing, or arranging lending or finance for a Lender using the service;
  3. a restriction on the Borrower advertising its proposal, or soliciting potential lenders or investors, outside the platform during the commitment period;
  4. a requirement on the Borrower to give reasonable advance notice to the operator of any material change affecting the Borrower, its business or the carrying out of its proposal;
  5. the obligations of the Borrower to disclose if there is any material change after funds have been provided; and
     
  6. An obligation on the Borrower to produce financial statements, including bank statements at least annually.