Provider of Participatory Financing Services (PPFS)
What are they?
PPFSs, such as Urbanitae, operate under Regulation (EU) 2020/1503, which regulates participatory financing at the European level. This regulation replaced the previous framework in Spain for participatory financing platforms (PFPs) and has unified the requirements for all operators in the sector across the European Union. Thanks to this new regulation, Urbanitae can offer its services to investors throughout Europe with a single authorization process through the so-called European passport.
This common framework strengthens transparency, investor protection, and system stability. Among other obligations, it requires PPFSs to classify investors based on their experience (experienced or inexperienced), assess the risks of each project, and provide all necessary information in a clear and understandable manner.
Key aspects to consider
When investing through a Provider of Participatory Financing Services, it is essential to consider the following factors:
- Scope of operation: PPFSs can operate throughout the European Economic Area, enabling more agile and diversified financing for both promoters and investors.
- Investor protection: The regulation introduces specific safeguards for inexperienced investors, such as reflection periods, risk warnings, and investment limits.
- Transparency and due diligence: PPFSs are required to offer detailed and understandable information about each investment opportunity and assess the solvency and viability of the published projects.
- Operational limitations: These providers cannot hold funds or offer financial advice unless they have additional authorizations to do so.
- Application to the real estate sector: In the case of Urbanitae, all published projects are real estate investments, mainly in equity or debt, analyzed and structured by a specialized team.