On 7 March 2018, the FCA published a Dear CEO letter it had sent to loan-based peer-to-peer (P2P) crowdfunding platforms asking them to review their wind-down arrangements.
Among other things the Dear CEO letter reminds P2P platforms that they are required to notify lenders of the arrangements they have made, including if the arrangements involve another firm taking over the management and administration of P2P agreements (SYSC 4.1.8BR).
The FCA also reminds PS2P platforms that it has previously highlighted in a consultation (Consultation Paper 18/20: Loan-based (‘peer-to-peer’) and investment-based crowdfunding platforms: Feedback on our post-implementation review and proposed changes to the regulatory framework) that it has observed, at times, that platform arrangements are inadequate. For example it consulted on proposals strengthening the requirements relating to wind-down arrangements. A related Policy Statement will be issued later this year.
The Dear CEO letter also describes three areas requiring urgent attention:
- systems and controls relating to wind-down;
- platform funding and remuneration models; and
- third party permissions required for wind-down.
Firms are expected to review and, where necessary, improve their wind-down plans. The FCA will ask certain firms to respond to it and provide details of their revised wind-down plans. The FCA will give specific feedback to those platforms whose wind-down plans it assessed as part of its supervisory work. Firms must notify the FCA at the earliest opportunity if the ongoing viability of their business is threatened.
