NEWSLETTER-2017

228 NEWSLETTER 2017 provide loyal investors. Considering the said advantages of crowd- funding, it becomes more of an issue for the Capital Market Board to regulate crowdfunding. Crowdfunding platforms commenced to be established in Turkey since 2010. The existing crowdfunding platforms operate through donation-based or reward-based models. As per the donation-based crowdfunding model, the supporters provide funding and do not have a return for their contributions. It is difficult to raise funds through this model. With respect to the reward-based crowdfunding model, the project owner or the entrepreneur would aim to achieve an amount with the funding, and if such amount would not be achieved within the specified timeline, then the contributed amounts would be returned to the investors. However, once the targeted amount is achieved, the reward, which was previously undertaken, would be shared amongst the investors. Another model is the investment-based crowdfunding model . By way of this model, the entrepreneur would collect the mon- ies from the investors in a lending sphere, or in return for the sale of its assets or shares 4 . Within the current structure, such platforms operate as those platforms that serve between the entrepreneur and project owners and their supporters and investors. Collection of mon- ies from the public falls within the regulatory scope of the Capital Market Board; however, currently there is no legislation regulating the operation of the crowdfunding system. Therefore, such legislative arrangement is urgently required 5 . Due to the lack of legislative background regarding crowdfund- ing and application of only reward-based and donation-based models to crowdfunding, crowdfunding has yet to be developed in Turkey. With the enactment of the Draft Law, the hesitation of the investors and supporters would be relieved, and crowdfunding would become actively used. Thus, in order to encourage investors, a flexible and free market approach is envisaged, while protecting the system. 4 Mediha Nur Onur, Öznur Değirmenci, Crowdfunding, Prime Ministry Undersec- retariat of Treasury of the Republic of Turkey Working Report, Number 2015-7/ June 2015, p. 2. 5 Workshop Report, p. 10.