The FCA has published a call for input on an upcoming post-implementation review of its crowdfunding rules. In 2014, when the market for crowdfunding was at an early stage of development, the FCA introduced a regime to provide adequate protections for investors while allowing customers and businesses to continue to have access to this innovative method of funding. Now that the market is more established and crowdfunding has become a more accepted form of raising capital, the FCA considers whether the rules need to be changed to reflect its current scale and status and the risks to investors, or whether the current regime deals adequately with the risks and does not need to be changed.
Issues relating to loan-based crowdfunding on which the FCA is seeking views include how conflicts of interest are managed, whether it is necessary to strengthen the due diligence rules for platforms, and whether the disclosure of risk warnings relating to non-readily realisable securities held within Innovative Finance ISAs should be mandated. The FCA also indicated that it intends to consult on applying the usual mortgage lending standards to peer-to-peer platforms to give consumers the full benefit of these protections.
In addition to feedback to this paper, the FCA will be analysing market trends and firms’ business models and systems and controls. The deadline for comments is 8 September 2016.
View FCA call for input on post-implementation review of crowdfunding rules, 8 July 2016