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What has happened?

The FCA has proposed new rules for P2P lenders in its Consultation Paper CP 18/20, published in July 2018. This is available here, in a document entitled Feedback on our post-implementation review and proposed changes to the regulatory framework (the post-implementation review or PIR was published in 2016, and it identified some “poor business practices”, and potential for harm in this sector, including customer confidence and participation being threatened by unacceptable firm conduct such as unreliable performance, or by disorderly failure, buying unsuitable products, poor customer treatment and prices set too high or quality set too low).

Comments on this CP are requested by 27^th October 2018. Should the proposed rules be finalised (and this is expected to be by the end of 2018), through its future supervision work the FCA will look for:

• visible improvements to financial promotions and marketing materials
• clearer and more meaningful data for investors on the range and performance of investments offered
• better quality of governance and oversight of both the platform and the system for risk rating and managing a portfolio of loans
• platforms’ systems and controls to manage conflicts of interest
• platforms to demonstrate that they are pricing loans fairly
• consumers to receive a fairer risk/reward trade-off

To ensure investors are given clearer information about investments, charges and risk, the FCA proposes to set out the minimum information that P2P platforms need to provide to investors. It expects that many platforms already provide much of this under existing financial promotions and disclosure rules, but where they do not, improvements will be required to meet existing and proposed standards.

Read the full document here.

How Thistle can help you?

Thistle will continue to keep this under review and will issue further updates where necessary. Please contact Thistle if you need assistance in relation to any of these issues.