NEWSLETTER-2017

226 NEWSLETTER 2017 The Draft Law on Crowdfunding* Att. Nezihe Boran Demir Introduction As per the simplest definition, crowdfunding is an alternative fi- nancing method for funding projects and entrepreneurs. The Draft Law on Amendments to the Capital Market Law (“Draft Law”) regarding crowdfunding prepared by the government has been submitted to the Grand National Assembly of Turkey on 26 December 2016. By the enactment of the aforementioned Draft Law, it is aimed to achieve to keep the crowdfunding platforms in a free market, and simultaneously to bring protection mechanisms. What is Crowdfunding? Crowdfunding provides financing or support through electronic platforms to project owners and entrepreneurs by the general populace consisting of, depending on the model of the crowdfunding, investors who have expectations in return, or supporters without any expecta- tions in return. An Entrepreneur may be a legal entity or a natural person, or even a non-governmental organization 1 . In other words, crowdfunding is a new generation of financing instrument enabling the general populace to fund or donate through internet websites small amounts, which would not have the same effect if it were a solo invest- ment 2 . As per the Draft Law, crowdfunding is defined as fund-raising from the public by means of crowdfunding platforms in order for funding that is necessary for an entrepreneur or a project within the scope of the rules to be determined by the Capital Market Board. * Article of April 2017 1 CrowdfundingAssociation, Opinions and Suggestions on the Draft Law on Crowd- funding and Secondary Regulations, Workshop Report, 11 February 2017, p. 8. 2 Draft Law on Amendments to the Capital Market Law dated 26 December 2016, the General Preamble, par. 2.