UK’s Financial Conduct Authority calls for crowdfunding feedback
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The UK’s Financial Conduct Authority (FCA) is asking for input on its post-implementation review of crowdfunding rules.
In its 31-page paper the FCA sets out some of the recent developments across the crowdfunding sector and a number of concerns it has identified.
The FCA wants to get feedback from all interested parties relating to the crowdfunding sector.
It has published the paper because in 2014 new rules came into force for the regulation of crowdfunding platforms operated by firms that it authorised. This year it wants to identify whether further changes are required.
Some key points from the paper:
- Rapid growth of the market. The FCA says while an estimated £500 million was invested on regulated crowdfunding platforms over the course of 2013, an estimated £2.7 billion was invested over the course of 2015. The FCA says there are now over 100 platforms in the market or seeking authorisation.
- Concerns over P2P financial promotions which are “not compliant” with its financial promotion rules across all types of media (for example, “unbalanced presentation of risks and misleading comparisons with savings account and banking”).
- Managing conflicts of interest – such as “between clients raising money and clients investing money”.
The FCA wants comments by 8 September 2016, either on its online response form or by emailing crowdfundingcfi@fca.org.uk
