Almost two years after Lendy went into administration, the platform is still listed as having permission to offer an Innovative Finance ISA (IFISA).
Historical reporting by Peer2Peer Finance News shows that although Lendy did gain IFISA permissions, it never actually launched the product.
In September 2018, Lendy reduced the minimum investment on its Lendy Wealth account from £50,000 to £10,000 in anticipation of an IFISA launch.
However, by January 2019, the peer-to-peer lending platform had been placed on a Financial Conduct Authority (FCA) watch list. The platform formally went into administration in May 2019.
Two years later, Lendy still appears on HMRC’s list of approved ISA managers, alongside active IFISA providers such as Assetz Capital, Zopa and Funding Circle.
When asked why the defunct platform was still on the ISA register, an HMRC spokesperson said: “Where an ISA manager is in administration and still has the required regulatory permissions, HMRC approval will not be withdrawn.
“To withdraw ISA manager approval in such circumstances may be detrimental to investors, who may wish to transfer to another ISA, and could compromise the work of the administrator.”
Peer2Peer Finance News understands that since Lendy did not launch its IFISA, there are no outstanding investor funds being held in ISA accounts.
Lendy investors are in the midst of a drawn-out administration process, which is set to continue for at least another two years, with a multi-million pound price tag.
Lendy investors have been openly critical of the way in which the platform was regulated, pointing out that the FCA must have been aware of the problems with the platform months before it went into administration.
The FCA has recently come under fire for its regulation of failed mini-bond platform London Capital & Finance (LCF), which went into administration in January 2019.
In late 2020, Dame Elizabeth Gloster published her report of the independent investigation into the FCA’s regulation of LCF. The report concluded that better communication was required between the FCA, HMRC and HM Treasury.
The HMRC spokesperson added that “inclusion in the [ISA manager] list is not an HMRC endorsement and potential investors may wish to take independent advice if they’re in any doubt about the suitability of the ISA manager or of a particular ISA.”