Peer-to-peer lending and crowdfunding platforms hope that the Gloster report on the regulatory failings at London Capital & Finance (LCF) will lead to better relations between the alternative lending community and the Financial Conduct Authority (FCA).
LCF went into administration in January 2019, with 11,600 investors having invested in bonds worth £237m.
In late 2020, Dame Elizabeth Gloster published her report of the independent investigation into the FCA’s regulation of LCF.
The report highlighted a number of regulatory failings which may have contributed to the LCF crisis, including a lack of engagement between the FCA and regulated entities.
“The Gloster report has stated very clearly that LCF was a failure of the regulator’s systems and controls, and a failure of enforcement of the existing rules,” said Bruce Davis, director of the UK Crowdfunding Association (UKCFA).
“One of the nine recommendations of the report was for regular communication between the regulator and regulated businesses on market issues.
“In the past there has been opportunity for frank and constructive dialogue between the industry and the regulator and we hope that this will continue in the future.”
Atuksha Poonwassie, managing director of Simple Crowdfunding, said that the Gloster review “will have a positive impact on supervision of firms such as more interaction, something that we are seeing already.”
“This is an opportunity for the regulators and P2P business owners to work together to implement some of the learnings from this report in order to further improve this marketplace,” she added.