THE HOUSE Crowd founder Frazer Fearnhead has expressed his frustration at the regulatory process after being told the platform’s peer-to-peer permissions are ready but the Financial Conduct Authority (FCA) is still looking at the crowdfunding side of the business.
Fearnhead, who launched property investment platform The House Crowd in 2012, said the firm applied for authorisation as a P2P platform in October 2015.
However, the regulator informed them six months ago that they would also require alternative investment authorisation for their crowdfunding operations, despite that no longer being their main focus.
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“We have been told the FCA has everything it needs in terms of P2P permissions,” Fearnhead said.
“But because we started off as an equity crowdfunding platform, although that’s now just three per cent of our business, we are still managing these properties so had to apply for alternative investment fund permission.
“It is frustrating. When we started the application in October 2015 we were told it would be 12 months.
“It is now two years down the line. It means we can’t move on to the next stage of the business, which is applying for our Innovative Finance ISA permissions.
“What is particularly frustrating is that many companies came to the marketplace two or three year after us and have permissions, we lost our first mover advantage. That doesn’t seem fair to me.”