The licence permits a platform to match business funding needs with investors, either by facilitating loans or by placing securities without a firm commitment and receiving and transmitting client orders. The ECSPR has applied since 10 November 2021, and platforms authorised under national regimes had until 10 November 2023 to obtain ECSP authorisation, after which only ECSP-licensed platforms could continue.

The regulation does not apply to offers above €5 million per project owner, calculated over 12 months. Larger raises fall under the Prospectus Regulation and usually need a MiFID investment firm licence.

Under Article 11, a provider must hold prudential safeguards equal to the higher of €25,000 or one quarter of its previous year's fixed overheads, reviewed annually. Applicants also need fit-and-proper management, conflict-of-interest and complaints procedures, a business continuity plan, and arrangements for the safekeeping of client assets and payments, which a platform often outsources to a licensed payment provider unless it holds a payment licence itself.

The ECSPR draws a line between sophisticated and non-sophisticated investors. Before a non-sophisticated investor gets full access, the platform runs an entry knowledge test. Where a single investment would exceed the higher of €1,000 or 5% of the investor's net worth, the investor must receive a risk warning, give explicit consent and show they understand the risk. Non-sophisticated investors also get a four-calendar-day reflection period during which they can withdraw an offer without reason or penalty.

An authorised provider can serve investors and project owners in other member states after notifying its home regulator. Under Article 18 it may start cross-border services when the regulator confirms the notification, or at the latest 15 calendar days after submitting the information, with no separate host-state approval.

An illustrative real-estate lending platform authorised in Lithuania raises €40 million a year across 60 projects, each under €5 million. With fixed overheads of €1.2 million, its prudential requirement is €300,000, one quarter of overheads, not the €25,000 floor. Expanding into Spain and Italy needs only a passport notification, so growth depends on marketing and local investor demand rather than new licences.

The licence sits with the legal entity, so a buyer acquires the company and needs the regulator's approval of qualifying holdings. Diligence covers the loan book's default history, how client money flows through the payment partner, and whether investor tests and warnings were run correctly, since gaps there create mis-selling exposure the buyer inherits. Platforms that also run P2P lending to consumers sit partly outside the ECSPR and may need a separate national licence.