FCA to introduce P2P marketing restrictions in December 2019
- Marc Shoffman
- On June 4, 2019
THE Financial Conduct Authority (FCA) has confirmed that peer-to-peer lending platforms will need to introduce an appropriateness test and marketing restrictions for investors.
Under the City watchdog’s rules, which were announced on Tuesday, platforms will be restricted to marketing to those who are certified or self-certify as sophisticated investors, those who are certified as high-net-worth investors, people receiving regulated investment advice, or those who certify that they will not invest more than 10 per cent of their net investible portfolio in P2P agreements.
The industry was widely anticipating these changes, which were first feted in the regulator’s proposals last year.
From 9 December 2019, P2P platforms will need to carry out an appropriateness assessment that considers a client’s knowledge and experience of the P2P investment before the platform can accept a subsequent instruction to invest.
Read more: Feature: Playing by the rules
The regulator said it is up to platforms to decide how this test will look but it has provided guidance on the information that can be provided and what needs to be assessed.
It has also strengthened its rules on plans for the wind-down of P2P platforms if they fail.
Firms will need to produce a ‘P2P resolution manual’ containing information about their operations that would assist in resolving the platform in the event of its insolvency.
“These changes are about enhancing protection for investors while allowing them to take up innovative investment opportunities,” Christopher Woolard, executive director of strategy and competition at the FCA, said.
“For P2P to continue to evolve sustainably, it is vital that investors receive the right level of protection.”
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