THE FINANCIAL Conduct Authority’s regulatory clampdown on the peer-to-peer sector risks restricting growth of the Innovative Finance ISA (IFISA), according to Assetz Capital’s chief executive.
Stuart Law, who heads up the business P2P lender, warned that the strong take-up of the IFISA could be hampered by the FCA’s proposed marketing restrictions for the sector.
Under the proposed changes, platforms would be restricted to marketing to those who are certified as sophisticated or high-net-worth investors or those that certify that they will not invest more than 10 per cent of their net portfolio in P2P agreements.
“There is still a long way for the IFISA to go, and its continued success will depend on a number of factors,” Law said.
“While the government is keen to see strong IFISA take-up, this clashes with the FCA’s suggestion to restrict retail access to peer-to-peer lending – demonstrated in its recent proposals regarding greater regulation.
“Restriction of retail cash coming into the P2P market could have a knock-on effect on the wider economy. As a business P2P lender who funds housebuilding as part of our support for businesses, we can foresee a significant negative impact on the country’s housing ambitions if retail funding is suppressed.”
It comes as the latest HMRC figures showed a boom in IFISA subscriptions in the last tax year.
Read more: IFISA uptake surpasses expectations