Crowdfunders: don’t be an April Fool
Back in October 2013, Gateley reported on proposals put forward by both the Financial Conduct Authority (FCA) and the European Commission for regulating the crowdfunding industry. The FCA has recently issued a policy statement confirming that many of the proposals from its original consultation paper will now be implemented with effect from 1 April 2014. Anyone involved in the crowdfunding industry risks looking foolish if they fail to comply with the new proposals by that date.
Loan-based crowdfunding (often known as P2P lending) refers to firms operating peer-to-peer or peer-to-business lending platforms. The FCA Principles contained in the FCA Handbook will be extended to apply to firms running P2P lending platforms. As a result, such firms will be subject to conduct-of-business rules, including provisions in relation to disclosure and promotions, client money protection rules and dispute resolution rules.
Firms will also be subject to minimum capital requirements, but the FCA has changed the element of this requirement that will be calculated as a percentage of funds loaned, by slightly reducing the percentages and introducing an additional layer for very large firms…
Click on the link below to read the rest of the Gateley briefing.
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