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Investing in real estate projects from affordable amounts is now possible thanks to crowdfunding. And as in any investment, having guarantees is key. In Spain, crowdfunding platforms must be authorized by the CNMV.
This not only accredits that they comply with the law, but also guarantees a more transparent and controlled environment for the investor. Let’s see what this authorization implies and why it is relevant for those who invest through platforms such as wecity.
What is the CNMV and what are its functions?
The National Securities Market Commission (CNMV) is the public body in charge of supervising and inspecting the financial markets in Spain. Its main function is to protect investors and ensure that companies offering investment products comply with current regulations.
In the case of real estate crowdfunding, this regulatory framework is based on Law 5/2015 on the Promotion of Entrepreneurial Financing and Regulation (EU) 2020/1503. Within this context, having CNMV authorization is essential for a platform to operate in a legal and controlled manner.
It is important to clarify that the CNMV does not advise or endorse specific investments, but it does control that the platforms operate within the law. It supervises that there is clear information, safe processes and measures to avoid bad practices.
What does it mean to be authorized by the CNMV?
When a platform is authorized by the CNMV, it means that it has passed a rigorous evaluation process and complies with all legal requirements to operate in Spain.
In the case of wecity, this means that it acts as a Participatory Financing Service Provider, a figure regulated by Law 5/2015. This allows it to intermediate between investors and real estate developers, complying with a series of obligations and standards designed to protect the investor.
Being authorized implies, among other things:
- Comply with transparency standards.
- Segregate investor accounts.
- Inform about the risks of each project.
- Submit audited accounts.
- To have adequate control and management systems.
In addition, this authorization is granted with a favorable proposal from the Bank of Spain and implies our registration in the CNMV’s official registry under number 9.
How does the CNMV supervise real estate crowdfunding platforms?
In Spain, participatory financing platforms such as wecity operate under the supervision of the CNMV. This supervision is articulated in three levels and each one has a specific application on the operation of these platforms:
- Initial authorization: Before operating, the CNMV evaluates the business model, control systems and experience of the management team, ensuring that the platform can manage investments. A favorable report from the Bank of Spain is also required. Only platforms that comply with regulations and offer sufficient guarantees receive registration as a PFP.
- Ongoing supervision: Once authorized, the CNMV regularly supervises the platform, which must submit annual audits, send periodic reports, maintain risk management systems and ensure transparency for investors. In case of irregularities, the CNMV may require corrections or conduct direct inspections.
- Supervision over the platform, not over the projects: The CNMV does not approve or evaluate individual real estate projects published on the platform. Its role is to ensure that the investment environment is legal, transparent and that investors have clear information to make informed decisions. It does not make economic or legal valuations of developers or opportunities.
What does and does not the CNMV control?
| What it does control | What it does not control |
| That the platform complies with the law | The profitability or success of the project |
| Clear and detailed information | The solvency of the developer |
| Investors’ money is well safeguarded | That there are no delays or changes in deadlines or licenses. |
| To be informed of the risks | Future revaluation or liquidity of the investment |
Why is it important for investors?
Investing through a regulated platform increases confidence and legal certainty. Knowing that there is an independent body such as the CNMV supervising compliance with regulations provides peace of mind and helps to avoid abusive practices or situations of opacity.
In addition, this regulated framework allows for complaints in case of incidents, and guarantees access to clear information on each investment opportunity.
In short, although the CNMV does not eliminate the risks of investing, it does provide a safer and more transparent environment.
How to differentiate an authorized platform from an unauthorized one?
Platforms authorized by the CNMV are listed in its official registry, which is accessible to anyone. If a platform is not registered, it does not offer the same guarantees and is not subject to regulatory supervision.
In the case of real estate crowdfunding, operating outside the legal framework may entail additional risks: lack of transparency, mismanagement of funds or lack of liability for non-compliance.
And in the specific case of wecity?
As for wecity, it is registered as Crowdfunding Platform with the CNMV and complies with Law 5/2015, in addition to adapting to European Regulation 2020/1503, which regulates crowdfunding in the EU.
It operates in a regulated environment, with continuous supervision and investment conditions accessible from 500 euros. Even so, every investment carries risks, such as loss of capital, lack of liquidity or delays. Therefore, the platform always provides key documentation and a cooling-off period for inexperienced investors.
Conclusion
CNMV authorization does not make an investment risk-free, but it does guarantee that it is made within a secure, transparent and controlled legal framework. For those who wish to diversify their wealth by investing in real estate projects without the need to directly buy a property, the fact that a platform is regulated makes a big difference.
Investing with guarantees starts with choosing the right platform. And that’s where wecity comes in.
