Business Agent Ltd, trading as NextFin, is launching a new peer-to-peer lending rating service. The firm explains how NextFin will provide an additional layer of due diligence on the industry for investors…
ON 17 OCTOBER, Business Agent Ltd held a launch party to unveil its new branding, NextFin, at the Karma Sanctum Hotel in London.
The evening went down a storm and it was great to see investors and platform providers support NextFin. It also celebrated and recognised the successes and growth of the UK’s alternative finance market, as awards were presented to a number of equity crowdfunding and peer-to-peer lending platforms.
NextFin revealed that it had acquired CrowdRating, the Financial Conduct Authority (FCA)-regulated equity crowdfunding ratings company. The firm also announced that it was about to launch a P2P ratings service in line with the new FCA crowdfunding rules coming into force in December. The firm has also launched a Social Impact Rating, alongside CrowdRating’s successful equity rating product. This recognises the contribution that equity crowdfunding has had on society in terms of employment, equality, environmental impact and funding innovation.
The new P2P rating service will be a compliance solution for platforms that will undoubtedly bring trust to the industry. The new rules compel platforms to allow their investment products and services to be compared with other providers. Paragraph 2.36 of the PS19/14 document says that platforms must “ensure that investors are provided with relevant information about an investment, to improve transparency of the fees and platform charges for the services provided, and to help prospective investors compare investment opportunities across different platforms.”
Business Agent Ltd, trading as NextFin and Wheatfromchaff Ltd, trading as CrowdRating, are regulated entities and are bound by the overarching principles of the FCA. They are authorised to give advice and promote equity and P2P investments. “Platforms should be aware of unauthorised rating platforms that are not qualified to give advice,” says Sacha Bright, chief executive of NextFin. “It is a legal requirement to be authorised by the FCA before giving advice or offering a financial promotion.”
Regulation is expensive but it is necessary to protect investors. NextFin is an independent ratings agency for alternative finance and because it is authorised, it is governed by the principles and rules of the FCA. Therefore, it aims not only to protect investors but also the platforms themselves, by ensuring the correct due diligence procedures are in place. It does this while presenting ratings in a clear, fair and not misleading way. Drawing on the success of CrowdRating’s equity rating service, NextFin has used a similar algorithm to rate P2P platforms on their due diligence, security, return on investment, default rate, transparency and products, to ensure it compares the platforms fairly.
NextFin’s checks even include web security on the platforms. In its first test run, NextFin found weaknesses in some platforms’ security – once informed, the platforms rectified this immediately and were delighted that a trusted third party identified the potential threats. It is NextFin’s mission to protect the industry, help investors make more of their money and help entrepreneurs get the funding they deserve. It is doing this by aggregating and rating the whole market free of charge, creating the alternative finance marketplace.
NextFin is helping platforms with their marketing, web security and compliance by providing the industry with an independent rating and comparison site. Sacha Bright has been visiting P2P platforms over the past few months, gathering data ahead of the January launch of its P2P rating service.
Feel free to get in touch to organise an appointment by emailing email@example.com. For more information on NextFin, please go to www.nextfin.co.uk.