FCA to regulate P2P agreements

FCA to regulate P2P agreements



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The Financial Conduct Authority (FSA) has set out its thinking about possible changes to its Handbook over two proposed changes which will impact on the regulated loan-based crowdfunding sector..

The Financial Conduct Authority (FSA) has set out its thinking about possible changes to its Handbook over two proposed changes which will impact on the regulated loan-based crowdfunding sector.

It follows news that the government plans to allow loan-based crowdfunding investments to be included in Individual Savings Accounts (ISAs), in a new component to be known as an Innovative Finance ISA (IFISA), which will be available from April 2016.

The government also plans to amend the regulated activities order to make the provision of advice about loan-based crowdfunding investments that are peer-to-peer (P2P) agreements a regulated activity.

The FCA currently regulates firms that operate loan-based crowdfunding platforms.

Its existing rules protect customers investing in this part of the crowdfunding market by focusing on the provision of information to consumers, which helps them to assess the risks associated with crowd-funding.

“In order to take account of the introduction of the IFISA, and anticipating that advising on P2P agreements becomes a regulated activity, we will need to amend certain provisions in the FCA Handbook,” said the FCA.

“We would welcome feedback from firms, industry and consumer groups, and other stakeholders.”

Comments need to be sent to the FCA by 31st December 2015 via its online response form or in writing.

Once the legislation had been finalised, the FCA will publish a consultation paper seeking feedback on the proposed rule changes.

To read the possible changes in full, click here.

 

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