The U.K. Financial Conduct Authority has published a Policy Statement containing its final changes to the rules and guidance governing loan-based crowdfunding platforms (or "peer-to-peer" platforms). The Policy Statement follows the FCA's July 2018 consultation paper on proposed changes to the regulation of the crowdfunding sector. Peer-to-peer platforms will need to comply with the majority of the changes by December 9, 2019, with the exception of the FCA's Mortgage and Home Finance Conduct of Business rules, which will apply to platforms that offer home finance products from June 4, 2019. The Policy Statement also reflects on the rules applicable to investment-based crowdfunding platforms (i.e. platforms that allow investors to invest in businesses directly, for instance through the purchase of shares or debt securities), in particular surrounding financial promotions for non-readily realized securities and non-mainstream pooled investments. The FCA continues to review responses to its July 2018 consultation paper in relation to these platforms and may issue additional rules and guidance in due course.
The changes to the rules governing peer-to-peer lending aim to prevent harm to investors by providing a proportionate regulatory framework that would not stifle innovation, and would include:
The Policy Statement will be of interest to peer-to-peer platforms, investment-based crowdfunding platforms, investors in, and borrowers under, such platforms and intermediaries who may refer home finance customers to peer-to-peer platforms. The required implementation date of December 9, 2019, for the majority of the rules coincides with the date the FCA's new Senior Managers and Certification Regime comes into force. This reflects the fact that, under the new peer-to-peer rules, responsibility for risk management must be allocated to one of a series of "senior manager functions" set out under the expanded SM&CR.
View the FCA's Policy Statement.
View the FCA's Dear CEO letter on wind-down arrangements at peer-to-peer platforms.
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