Today the Financial Conduct Authority (FCA) released its post implementation review of crowdfunding platforms and its proposed changes for the industry.
We wanted to outline what this means and why we welcome this positive step to help continue the growth of peer-to-peer lending.
What’s it all about?
The post-implementation review of what the FCA calls loan-based crowdfunding platforms is a review of the rules around our industry. The FCA put in place some temporary rules in 2014. It wanted to give the industry some time to play out and see what’s what. It always had in mind that it would reassess before creating some permanent rules and guidelines.
So what was the verdict?
That the P2P investment options out there are pretty broad. This makes it very important that companies are up front about the risks involved. They think more regulation will drive the industry to be more transparent and better protect the customer.
And what does Zopa think?
We wholeheartedly agree. We always try to put customers at the heart of our business and so we strive to make sure our customers understand the risks of P2P. We do this by being clear on what customers can expect every step of the way. We also believe strongly in a well regulated industry – we lobbied for years for effective regulation. We’re also a founder member of the P2P Finance Association (P2PFA) and are fully signed up and on board with the association’s operating principles, designed to give a high standard of disclosure to customers. The more that can be done to make sure all P2P organisations have these standards, the better in our opinion.
What happens now?
There’s a consultation period. We’ll work with the regulator as they establish the right standards for customer’s P2P investments. The consultation period ends on 27 October 2018. Then the FCA will bring out some new rules for the industry.