Equity crowdfunding and regulation: implications for the real estate sector in Italy
Journal of Financial Regulation and Compliance
ISSN: 1358-1988
Article publication date: 7 February 2020
Issue publication date: 21 July 2020
Abstract
Purpose
This paper gathers initial evidence about the nature and features of the equity crowdfunding model in Italy, especially in terms of regulations. The purpose of this study is to examine how equity crowdfunding might support the real estate sector in Italy.
Design/methodology/approach
To explore the recent initiatives in the development of FinTech in Italy, especially referring to equity crowdfunding’s instrument, a qualitative perspective is used. In particular, this paper relies on primary data from regulations and secondary data from the public domain, which are examined in relation to the current literature.
Findings
The results of this study show that equity crowdfunding represents a funding method that is rapidly increasing in Italy, despite rather rigid regulation. Among the various sectors involved, the real estate sector could benefit from the crowdfunding models and, specifically, from the equity one. The development of new real estate equity crowdfunding portals that allow diversification of investment (by reducing the typical entry barriers for real estate investment) could guarantee greater investment transparency and simplicity.
Practical implications
Real estate crowdfunding can be a simple way to invest in the real estate industry. Thanks to the use of technology, specifically internet-based platforms, this type of crowdfunding allows for small investors, as well as professional investors, to access an asset class otherwise not open to small investment tickets and improve the diversification of investments.
Originality/value
Although recent literature has examined the concept of crowdfunding and highlighted different models, aspects and campaigns, no prior studies, to the authors’ knowledge, have explicitly and jointly investigated, also based on the state of art of regulation, the equity crowdfunding model and the real estate sector in Italy.
Keywords
Citation
Battisti, E., Creta, F. and Miglietta, N. (2020), "Equity crowdfunding and regulation: implications for the real estate sector in Italy", Journal of Financial Regulation and Compliance, Vol. 28 No. 3, pp. 353-368. https://doi.org/10.1108/JFRC-08-2018-0109
Publisher
:Emerald Publishing Limited
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