Marketplace Lending as a New Means of Raising Capital in the Internal Market: True Disintermediation or Reintermediation?

Marketplace lending,enabled by technological innovation, represents a new opportunity for raising capital.It is regarded by the EU as having the potential to expand the financing options of SMEs and improve the integration of the Internal Capital Market. However,applying traditional legal categories and existing laws to marketplace lending and to other examples of the new “platform economy” is not simple. Member States have adopted very different regulatory responses towards marketplace lending, with negative effects on the internal market.The essence of the regulatory dilemma consists in determining whether marketplace lending represents –as it has been depicted by platforms themselves, particularly in contractual agreements through disclaimers – a true disintermediated method of raising capital, an innovative form of intermediation, or a traditional kind of intermediation disguised in new and fashionable clothing.The answer to this question has relevant consequences for the regulatory treatment of marketplace lending and it requires a uniform response in the EU, at least with respect to the largest cross-border platforms. After briefly describing marketplace lending in Europe and the various current trends in regulating it, the paper discusses the main regulatory issues from the perspective of the above-mentioned issues.It analyzes the recently adopted Regulation on European Crowdfunding Services Providers in order to verify whether the regulatory choices that it has made are effective,both for the further development of marketplace lending and for addressing the associated risks.