Peer2Peer Finance News
The UK's first peer-to-peer finance magazine for investors and the industry
  • Home
  • News
    • Personal Finance News
    • Industry News
    • SME News
    • Global News
  • Property
  • IFISA
    • IFISA Guide
  • Video
  • Open Banking
  • Cryptocurrency
  • Features
    • Joint Ventures and Promoted Content
  • Comment & Analysis
  • What is P2P?
  • Partners
  • Events
    • Past Events
  • P2P Power 50
    • Power 50 2020
    • Power 50 2019
    • Power 50 2018
    • Power 50 2017
  • Sign up to our e-newsletters
  • Magazine
  • Directory
  • Jobs
  • My Account
    • Manage Account
    • Change Password
    • Log In
    • Log Out
LONDON- City of London and Bank of England / Royal Exchange in the City of London.
October 22 2020

P2P lenders raise concerns about unregulated mini-bond providers

Michael Lloyd Industry News, News, Top 3 Abundance Investment, Bruce Davis, Crowdproperty, Daniel Rajkumar, FCA, Mike Bristow, mini-bond ban, Propio, Rebuildingsociety, UK Crowdfunding Association

Peer-to-peer lending and crowdfunding platforms have raised concerns over some mini-bond providers operating in the unregulated space following the temporary mini-bond ban.

Since the ban was introduced last November, industry stakeholders have noted that more mini-bond providers are moving into the unregulated space where there is less protection for investors.

Read more: Greater FCA powers hoped to negate need for mini-bond ban

“I do worry about investors who invest in unregulated products and also worry about investors in certain regulated products,” said Daniel Rajkumar, managing director of Rebuildingsociety.

“With regulated companies, investors should have more information about what they’re getting into, but with unregulated firms there are no repercussions about misinformation and fewer consequences for firms acting poorly.

“There are a few P2P mini-bond providers moving to P2P. Propio is a really good example of a mini-provider coming to us, recognising the value of regulation and compliance. We’re delighted to help them join the sector.”

Read more: Permanent mini-bond marketing ban slated as “unnecessarily damaging”

Mike Bristow, chief executive of CrowdProperty, has seen some providers apply to the Financial Conduct Authority (FCA) to become regulated under 36H, but others simply operate as unregulated entities.

“I think there are enormous issues around that on multiple levels,” he said. “It affects existing customers and new customers.

“Some have built consumer brands and people can sign up and go to them having built an awareness under the regulatory cover.

“And if a firm is regulated and their existing customers benefit from the regulatory cover and then they suddenly become unregulated and they no longer benefit from that cover, there are enormous issues.

“I think anyone choosing to go down this route is treading on thin ice on multiple levels.

“I’m sure the FCA thought of this, they have a very good perspective on intended and unintended perspectives on policies.”

Meanwhile, Bruce Davis, co-founder and managing director of Abundance Investment and director of the UK Crowdfunding Association, which has consulted on the mini-bond ban with the FCA, shared Bristow’s concerns.

Read more: Lawyer hits out at marketing of Basset & Gold mini-bonds to pensioners

“We have seen companies using unregulated methods to issue the bonds and that’s exactly what we warned would happen and it’s a very bad outcome from the ban,” he said.

“There is no protection for these investors. The ban only applies to regulated firms, which from what we’re aware of, weren’t causing problems.

“It doesn’t stop someone following the unregulated route and therefore some companies are following that approach. The FCA must’ve known it would happen and would say it’s outside of their perimeter and I disagree.”

More than £61bn borrowed via government-backed loan schemes Financial Services Bill could benefit P2P sector

Related Posts

Close-up Of A Person's Hand Filling Contract Form

Comment & Analysis, SME News, Top 3

Leaseback – a solution for SMEs in times of Covid-19?

THP_7598 (1)

Global News, Industry News, News, Property, Top 3

Property Bridges launches auto-invest product

Person Flying Car Over Declining Stacked Coins

Industry News, News, Top 3

Second charge mortgage and car finance markets contract

Popular posts:

  • JP Morgan chief predicts shift to non-bank lending
  • FCA has increased surveillance over last 12 months
  • P2P veteran joins bridging lender
  • Recovery loan scheme opens today
  • SMEs warned they could be excluded from recovery loan scheme
  • Every IFISA that is open for investment right now
Back To Top
  • Home
  • Contact
  • About
  • Team
  • Advertising
  • Subscribe
  • Privacy
  • T&Cs
  • Disclaimer

Follow Us on Social Media

© Peer2Peer Finance News 2020
• Additional design by