FCA eyes commission ban for P2P Isas

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The FCA is considering whether to ban commission on peer-to-peer lending within Isas.

Under Government plans, peer-to-peer lending agreements will be allowed within Isas from April 2016. Advising on these products will become a regulated activity from the same date.

In a discussion paper published today, the FCA says it is considering whether to ban commission for peer-to-peer Isa advice.

If commission is banned, this would also prevent the payment of commission to platforms such as those run by Sipp operators.

The regulator is considering whether its rules on the suitability of advice should apply to firms advising on the products.

But the FCA says it would not be proportionate to make advice on peer-to-peer lending subject to all the requirements of the RDR. It says it would not be appropriate for independent advice firms to consider peer-to-peer investments.

In addition, the FCA is asking for views on whether investors should be given information on: the tax consequences if the peer-to-peer loan is not repaid; the tax consequences of withdrawing a peer-to-peer agreement from an Isa; and the procedure for switching Isa manager.

The FCA is asking for responses to the paper by 31 December. It will then consult on any changes.