29 August 2017

Regulatory spotlight on crowdfunding & P2P lenders

The FCA has launched a crackdown on peer-to-peer lending in an effort to ensure protection for retail investors within this heavily risk-associated market.

The review, initially announced by the FCA in December 2016, is expected to see crowdfunding and peer-to-peer (P2P) lending platforms bear the brunt of the regulator’s focus. The FCA believes that there are a number of risks and issues within the industry, particularly regarding returns, compared to other types of investment. The FCA has also raised concerns that platforms are not currently providing sufficient detail regarding past loan performance.

The FCA will demand that crowdfund and P2P lenders provide significantly more information on previous performance and the possible return. Clearer details on levels of due diligence carried out on companies looking to borrow from the platforms will also be necessary.

However, the regulator has highlighted that any regulation will need to be appropriate for the level of risk associated with this type of investment, meaning not only protecting consumer interests but also avoiding market stagnation.

With extensive experience in helping P2P and crowdfunding business navigate regulatory and commercial requirements, we’re able to provide all the regulatory support and guidance needed to help you thrive in a changing world.

If you would like more information, please do not hesitate to contact us.

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