Regulator pushes back plans to update peer-to-peer lenders and crowdfunders on new rules.
Those waiting for further clarity on the FCA’s proposals for the crowdfunding industry will have to wait a little longer. The regulator has indicated that is now in purdah, and will not be publishing anything until after the election.
The FCA launched its planned post-implementation review of crowdfunding regulations for debt and investment-based platforms with a call for input in the summer of last year. It then hinted at new rules for the crowdfunding sector in mid-December, including “more prescriptive requirements on the content and timing of disclosures by both loan-based and investment-based” platforms.
For loans-based platforms specifically, wind-down plans, mortgage lending standards and cross-platform investment were also identified as areas of concern.
The regulator said then that it planned to report on the final conclusions of the review in mid-2017, but some in the industry had been expecting to see these “imminently”.
We now know that this isn’t going to happen. Some platform representatives, who wished to remain anonymous, have been told to expect the publication of the new proposals to shift from spring to summer.
Stuart Law, co-founder and CEO of Assetz Capital, believes that the consultation will be a key development in the ongoing attempts of some of the biggest peer-to-peer lenders to get fully authorised.
“We would expect that where a platform’s activities align with the proposed new framework they could perhaps hope to see the authorisation process continue apace and where their activities may be affected by the consultation that they might need to await any decisions arising from that consultation before they could receive permissions, after any appropriate changes to their business model,” he said.
Either way, Law had hoped to see those platforms that are currently operating under interim permission (including Assetz) authorised by the summer. He said that the country needs an alternative to the highly leveraged banking sector in order to better support the economy through the next cycle.
“The faster we get permissions the faster we can increase our scale to help address the common objective of increasing the country’s financial stability,” he said.