View more on these topics

FCA to tighten rules on crowdfunding


The FCA plans to toughen its rules for crowdfunding firms, including extending mortgage-lending standards to loan-based platforms.

The regulator today issued an update on its review of the loan-based and investment-based crowdfunding market.

The regulator has proposed several new rules for the market, which it will consult on in early 2017.

The new rules include more prescriptive requirements on the content and timing of disclosures by both loan-based and investment-based crowdfunding platforms.

For loan-based platforms only, the FCA plans to consult on strengthening rules around wind-down plans, imposing additional restrictions on cross-platform investment and extending mortgage-lending standards to loan-based platforms.

In its update, the FCA says it has found it is difficult for investors in both loan-based and investment-based crowdfunding platforms to compare crowdfunding with other asset classes because of complex and often unclear product offerings.

It also says it is difficult for investors to assess the risks and returns of investing on a platform and that the way some firms are structured leads to conflicts of interest that are not being managed properly.

FCA chief executive Andrew Bailey says: “Our focus is ensuring that investor protections are appropriate for the risks in the crowdfunding sector while continuing to promote effective competition in the interests of consumers.

“Based on our findings to date, we believe it is necessary to strengthen investor protection in a number of areas. We plan to consult next year on new rules to address the issues we have identified.”

The FCA expects its research and investigatory work to be finished early in 2017.



Advisers shun P2P and crowdfunding Isa changes

The move to include peer-to-peer lending and crowdfunding in Isas was heralded by the industry, but a new report has questioned the impact it is likely to have, particularly on the adviser-led market. In the Autumn Statement, Chancellor George Osborne announced the list of qualifying investments for the new Innovative Finance Isa will be extended […]


Govt to allow debt-based crowdfunding in Isas

Crowdfunded debt securities will be allowed within Isas from next year, the Government has confirmed. In the March Budget the Government announced it would consult on whether to extend eligible Isa investments to include investment-based crowdfunding. In its response to the consultation published today, the Government says Isas will be extended to crowdfunded debt securities […]


FCA warns crowdfunding sites on social media use

The FCA has written to crowdfunding websites raising concerns they are not using the appropriate risk disclaimers when promoting their business on social media. Equity crowdfunding allows small, private companies to raise money from online investors by selling stakes from £10. The Times reports the regulator has told the sites to put risk warnings into […]

UK housebuilders remain a value trap – despite post-Brexit falls

Despite the sharp drop in housebuilders following the Brexit result, valuations in the highly illiquid market are still at elevated levels. And whilst some investors may take comfort from superficially low price/earnings multiples, are earnings sustainable over the long term, asks Holly Cassell, Assistant Manager of the Neptune UK Mid Cap Fund. Click here to […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. At last. I have never considered this a suitable investment vehicle and I have come across cases where it is no more than just begging.

    If a proposition has legs there is no shortage of traditional lending sources. It is only where you have flaky (or downright dubious) propositions that crowd funding is the vehicle.

    By all means give to charity if you are so minded, at least you are under no illusions that you will be making a return.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm