On 26 August the FCA published a letter (dated 25 May 2021) previously sent to the board of directors at loan-based peer-to-peer (P2P) crowdfunding platforms.
In the letter the FCA seeks to set out its views and expectations in a number of areas, specifically:
- set out our view of the key risks P2P platforms pose to their customers or the markets in which they operate;
- outline our expectations of P2P firms, including how firms should be mitigating these key risks; and
- describe our supervisory strategy to ensure that firms are meeting our expectations, and harms are being remedied.
In respect of these areas, the FCA has identified four areas of potential harm for investors:
- the secondary markets for loans, and associated risk management obligations;
- wind-down plans (WDPs), their triggers, and liquidity monitoring ;
- disclosure of loan performance during periods of loan forbearance, and the use of contingency funds; and
- unclear platform fees, charges and priority over recoveries.
The FCA requires recipients of the letter to take action in respect of any of these areas and harms that may be relevant to their businesses, ensuring that firms are delivering fair outcomes for consumers.
To view a copy of the letter, please click here.