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Peer2Peer Finance News | September 23, 2019

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The other December deadline facing P2P lenders

The other December deadline facing P2P lenders
Suzie Neuwirth

AS IF peer-to-peer lenders didn’t have enough regulations to grapple with, the Financial Conduct Authority (FCA) on Friday announced its final rules for the extension of the Senior Managers and Certification Regime (SMCR).

These regulations will apply to all FCA-regulated firms from December, therefore including most P2P lenders, aiming to increase individual accountability of senior staff in financial services for any regulatory failings.

This could mean a compliance headache for some firms, which may have to change their processes to ensure they are operating in line with the new rules.

Read more: The compliance change all regulated firms need to know about

“Today’s announcement of the SMCR final rules comes as a final reminder to businesses,” said Shrenik Parekh, senior manager at accountancy firm BDO.

“They now have less than five months to implement the regime.

“A lot of firms do seem to be behind the curve and are going to find meeting the December deadline a challenge.”

Parkeh said that complying with the rules would be a challenging task due to the depth of detail in the regulations.

Read more: Government rules out shifting regulatory responsibility for savings

“Firms must remember that this isn’t just about the December deadline but demonstrating ongoing compliance with the regime,” he added.

The City watchdog is expected to launch a thematic review across a number of sectors next year, to check that firms are properly complying with SMCR.

The FCA’s final rules confirmed that the head of legal is to be excluded from the requirement to be approved as a senior manager.

Concerns had been raised that the disclosure requirement would conflict with laws surrounding legal privilege.

Read more: FCA brings P2P creditworthiness rules into line with mainstream lenders

As well as SMCR, P2P lenders will also need to comply with the FCA’s updated rules from its long-awaited review into the sector, which come into effect on 9 December.