An insolvency expert has warned that peer-to-peer lending platforms could face more accounting rules under government proposals for the audit industry.
In the coming weeks a government consultation will be published, which is expected to include proposals to make directors personally liable for the accuracy of financial statements, meaning they could be hit with temporary bans or fines for mistakes.
Mark Turner (pictured), managing director, regulatory consulting at business advisory firm Duff & Phelps, warned it could lead to more rules for platforms to adhere by, but added the detail would be in the consultation.
“It’s something to be on platforms’ radar but they shouldn’t panic until we see more detail,” he said.
“Potentially there will be more rules to follow and additional reporting disclosures and directors would need to take steps to manage the risks but before jumping to conclusions we need to see the detail.
“The financial sector does already have the Senior Managers and Certification Regime (SM&CR), which has been in place for a just over a year for P2P platforms, so this could be rolling out some of the spirt of SM&CR to non-financial services companies, making individuals more accountable.
“There’s the potential for more rules but before we see the detail and what it looks like in practice, I think firms shouldn’t worry too much.”
Read more: Mind the gap
Some rules under SM&CR returned to normal in January after firms adapted to the impact of Covid-19.
In December, the City regulator said some of its previously available provisions would end on 7 January and that the relevant modifications by consent will end after 30 April 2021.