The City regulator expects to publish a policy statement on strengthening financial promotion rules for high-risk investments, including peer-to-peer lending, in the second quarter of next year.
The Financial Conduct Authority (FCA) published its Regulatory Initiatives Grid on Monday 1 November, which confirmed that it will publish its consultation paper on financial promotion rules for high-risk investments in the fourth quarter of this year.
Industry stakeholders had already told Peer2Peer Finance News of the expected timeframe for the publication of the consultation paper, but this is the first time that the FCA has publicly confirmed it.
The FCA is looking to strengthen financial promotion rules for high-risk investments, due to concerns that everyday investors do not properly understand the risks involved.
In October, the regulator published a three-year strategy to enhance consumer protections and said it is aiming to halve the number of consumers putting money into high-risk investments who indicate a low risk tolerance or demonstrate the characteristics of vulnerability, by 2025.
P2P lending platforms have hit back at the proposals, arguing that they unfairly lump regulated P2P investments in with unregulated products such as cryptocurrencies.
The UK Crowdfunding Association, an industry trade body, sent research to the FCA earlier this year that showed investors understand the risks in the sector.
Read more: Additional P2P regulation predicted
Separately, the Regulatory Initiatives Grid revealed that the Treasury will publish its policy responses regarding the potential regulation of mini-bonds and cryptoassets later this year.
“We are embarking on an ambitious agenda to help develop a more effective and efficient UK regulatory model,” said co-chairs of the Financial Services Regulatory Initiatives Forum, FCA chief executive Nikhil Rathi and Sam Woods, deputy governor, prudential regulation of the Bank of England.
“Many of these changes will enhance firms’ and the economy’s competitiveness and ease operational burdens in the long-term, or are meeting important government priorities such as on the transition to a net zero economy.”