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Notice Summary

Title:
UK-London: Support with the Crowdfunding Regulation in Jordan
Document Ref:
GB003ZM330937
Document Type:
Contract Notice - Other
Published By:
European Bank for Reconstruction and Development
Date Published:
21 May 2020
Deadline Date:
18 June 2020
Document Source:
Framework/DPS:
No
Alert Profile:
Labels:

Notice Abstract

Support with the Crowdfunding Regulation in Jordan Single Stage Open Competitive Selection – Request for Proposals Project Description: The European Bank for Reconstruction and Development (the “EBRD” or the “Bank”) is planning to initiate a new technical cooperation project in Jordan (the “Project”) to assist the Central Bank of Jordan (“CBJ”) with establishing a legal and regulatory framework regulating crowdfunding activities. Crowdfunding as an alternative financing method dates back to the 2008 financial crisis, as a result of which businesses – among other difficulties – faced significant problems in raising funds and capital. Crowdfunding refers to an open call to the public to raise funds for a specific project, while crowdfunding platforms are internet platforms that enable interaction between fundraisers and the crowd. Crowdfunding, among other benefits, offers accessible and competitive marketplaces for seeking capital and receiving it quicker and at a lower cost, boost to economic activity, particularly in relation to SMEs (that account for large proportion of employment and added value), as well as increased financial inclusion. There is also evidence that crowdfunding may help women entrepreneurs to obtain investment funding from other women, in situations where women tend to find it difficult to secure financing for their entrepreneurial endeavours. There are many different crowdfunding business models; the primary types are: (i) equity-based crowdfunding, (ii) debt-based (also known as peer-to-peer (P2P) or marketplace lending), (iii) reward-based crowdfunding and (iv) donation-based crowdfunding. While crowdfunding has, in all its forms and shapes, been evidently beneficial to the start-up community and entrepreneurs, some of crowdfunding business models, especially debt-based and equity-based crowdfunding, represent certain risks and drawbacks. Supervisors in many countries see fraud, capital loss, money laundering and data loss as significant risks, which gave rise to a global trend of more regulation in the sector of alternative finance. It is expected that by mid-2021 most jurisdictions will be regulating equity-based crowdfunding and more than a third intend to regulate P2P lending; bespoke frameworks will likely become even more common. Regulatory change, however, is not limited to unregulated sectors becoming regulated; it also includes revisions of pre-existing frameworks, often in favour of bespoke ones. Together with addressing the inherent risks and drawbacks that crowdfunding activities represent, bespoke regulations are aimed at adding clarity with respect to the legal treatment of such transactions. To this end, the CBJ approached the EBRD requesting assistance with – inter alia – establishing a legal and regulatory framework regulating crowdfunding activities. Balancing financial technological innovation with safety and soundness of the financial system has been identified as one of the key challenges by the Financial Stability Department of the CBJ. Assignment Description: The objective of the Project is assisting the CBJ with the following: (i) reviewing all related legislation including existing banking laws, the draft of finance companies bylaw, payment legislation, companies law and capital markets laws in Jordan and preparing a concept paper recommending a way forward to the CBJ in regulating crowdfunding activities; (ii) drafting any necessary regulation for crowdfunding activities (the “Crowdfunding Regulation”); (iii) organising capacity building and/or outreach activities to present international best practice on crowdfunding, the new Crowdfunding Regulation and explain the benefits of crowdfunding to the Jordanian market. EBRD intends to select and contract a firm or a group of firms (the “Consultant”) in order carry out the tasks of the Project.

Notice Details

CONTRACT NOTICE – NATIONAL

SERVICES

1 Authority Details

1.1

Authority Name and Address

European Bank for Reconstruction and Development
N/A
London UK
N/A N/A
lewishev@ebrd.com N/A

1.2

Address from which documentation may be obtained

As in 1.1

1.3

Completed documents must be returned to:

As in 1.1

2 Contract Details

2.1

Title

Support with the Crowdfunding Regulation in Jordan

2.2

Description of the goods or services required

Support with the Crowdfunding Regulation in Jordan

Single Stage Open Competitive Selection – Request for Proposals

Project Description:

The European Bank for Reconstruction and Development (the “EBRD” or the “Bank”) is planning to initiate a new technical cooperation project in Jordan (the “Project”) to assist the Central Bank of Jordan (“CBJ”) with establishing a legal and regulatory framework regulating crowdfunding activities.

Crowdfunding as an alternative financing method dates back to the 2008 financial crisis, as a result of which businesses – among other difficulties – faced significant problems in raising funds and capital. Crowdfunding refers to an open call to the public to raise funds for a specific project, while crowdfunding platforms are internet platforms that enable interaction between fundraisers and the crowd. Crowdfunding, among other benefits, offers accessible and competitive marketplaces for seeking capital and receiving it quicker and at a lower cost, boost to economic activity, particularly in relation to SMEs (that account for large proportion of employment and added value), as well as increased financial inclusion. There is also evidence that crowdfunding may help women entrepreneurs to obtain investment funding from other women, in situations where women tend to find it difficult to secure financing for their entrepreneurial endeavours.

There are many different crowdfunding business models; the primary types are: (i) equity-based crowdfunding, (ii) debt-based (also known as peer-to-peer (P2P) or marketplace lending), (iii) reward-based crowdfunding and (iv) donation-based crowdfunding.

While crowdfunding has, in all its forms and shapes, been evidently beneficial to the start-up community and entrepreneurs, some of crowdfunding business models, especially debt-based and equity-based crowdfunding, represent certain risks and drawbacks. Supervisors in many countries see fraud, capital loss, money laundering and data loss as significant risks, which gave rise to a global trend of more regulation in the sector of alternative finance. It is expected that by mid-2021 most jurisdictions will be regulating equity-based crowdfunding and more than a third intend to regulate P2P lending; bespoke frameworks will likely become even more common. Regulatory change, however, is not limited to unregulated sectors becoming regulated; it also includes revisions of pre-existing frameworks, often in favour of bespoke ones. Together with addressing the inherent risks and drawbacks that crowdfunding activities represent, bespoke regulations are aimed at adding clarity with respect to the legal treatment of such transactions.

To this end, the CBJ approached the EBRD requesting assistance with – inter alia – establishing a legal and regulatory framework regulating crowdfunding activities. Balancing financial technological innovation with safety and soundness of the financial system has been identified as one of the key challenges by the Financial Stability Department of the CBJ.

Assignment Description:

The objective of the Project is assisting the CBJ with the following:

(i) reviewing all related legislation including existing banking laws, the draft of finance companies bylaw, payment legislation, companies law and capital markets laws in Jordan and preparing a concept paper recommending a way forward to the CBJ in regulating crowdfunding activities;

(ii) drafting any necessary regulation for crowdfunding activities (the “Crowdfunding Regulation”);

(iii) organising capacity building and/or outreach activities to present international best practice on crowdfunding, the new Crowdfunding Regulation and explain the benefits of crowdfunding to the Jordanian market.

EBRD intends to select and contract a firm or a group of firms (the “Consultant”) in order carry out the tasks of the Project.

2.3

Notice Coding and Classification

2.4

Total quantity or scope of tender

Location:

Jordan

Consultant Selection Procedure: Single stage open competitive selection. Interested firms or groups of firms are invited to submit a Technical and Financial Proposal.

Assignment Start Date and Duration: The Assignment is expected to start in Q2 2020 and has an estimated overall duration of 18 (eighteen) months.

Cost Estimate for the Assignment: EUR 170,000 (exclusive of VAT).

Funding Source: It is anticipated that the contract will be financed by EU Neighbourhood Investment Facility. Selection and contracting are subject to the availability of funding.

Eligibility: There are no eligibility restrictions based on the consultant's country of origin.

3 Conditions for Participation

3.1

Minimum standards and qualification required

4 Administrative Information

4.1

Type of Procedure

The procedure type is unknown.

4.2

Reference number attributed to the notice by the contracting authority

n/a

4.3

Time Limits

   18-06-2020  Time 17:00

4.5

Language or languages in which tenders or requests to participate can be drawn up

EN 

4.6

Tender Submission Postbox

5 Other Information

5.1

Additional Information

Please visit the following portal to view this notice:

https://www.ebrd.com/work-with-us/procurement/pn-83251.html

Closing date:18 Jun 2020 at 17:00 hrs London

(MT Ref:330937)

5.2

Additional Documentation

5.3

Publication date of this notice

 20-05-2020

Current Notes