ERDEM-NEWSLETTER-2018-metin

226 NEWSLETTER 2018 test is foreseen. In the UK, firms providing personal recommenda- tions to invest in P2P agreements will also be providing a regulated activity. No appropriateness test for lending-based crowdfunding, however platforms are established, implement and maintain adequate policies and procedures sufficient to ensure compliance of the firm, including it managers, employees and appointed representatives (or where applicable, tied agents) with its obligations under the regula- tory system, and for countering the risk that the firm might be using to further financial crime 10 . Furthermore, almost all of the bespoke regimes foresee professional integrity on the platforms and, as well, be of good repute and experience. In the UK, platforms should have appropriate resources to employ people who are competent, fit and proper for their role, and have a suitable business model. Furthermore, the employees controlling the business must exhibit honesty, integrity, and be of good reputation. They must be financially sound and have appropriate competence and capability for their role. Investment-based Crowdfunding The different business models and national approach to the fun- damental notions, such as investment product, financial instrument, and investment service creates regulatory differences in the Member States regarding investment-based crowdfunding. There are mainly four models of authorization of crowdfunding platforms in EU Member States that are not mutually exclusive and, in practice, they are combined in certain Member States 11 . Some Mem- ber States, like the Netherlands, apply securities laws to crowdfund- ing activities, and require investment-based crowdfunding platforms dealing with financial instruments to hold a Markets in Financial Instruments Directive (“MiFID”) 12 license, and be compliant with the relevant regime. In two Member States, platforms can be authorized under a national bespoke regulation developed in accordance with the exemption in Article 3 of MiFID. Other Member States do not enforce MiFID and/or prospectus requirements with respect to investment- 10 Working Document, p. 48. 11 Working Document, p. 18. 12 Markets in Financial Instruments Directive (2004/39/EC).