The new rules cover:
• More explicit requirements to clarify what governance arrangements, systems and controls platforms need to have in place to support the outcomes they advertise, with a particular focus on credit risk assessment, risk management and fair valuation practices.
• Strengthening rules on plans for the wind-down of P2P platforms if they fail.
• Introducing a requirement that platforms assess investors’ knowledge and experience of P2P investments where no advice has been given to them.
• Setting out the minimum information that P2P platforms need to provide to investors.
• Applying the Mortgage and Home Finance Conduct of Business (MCOB) sourcebook and other Handbook requirements to P2P platforms that offer home finance products, where at least one of the investors is not an authorised home finance provider.
FCA’s new rules are avaliable in full here.
Filip Karadaghi, LandlordInvest’s CEO stated that:
“We welcome FCA’s new rules as they are clearly designed to offer consumers more protection. This is particularly important given the recent collapse of a notable platform and general poor business practises witnessed by some other platforms.
Peer-to-peer is risky compared to many other financial products and only those consumers that fully understand the risks and that they may lose part or all of their investments, should consider investing in P2P.
Even so, as with any investing, investing in P2P should be made with prudence and with appropriate diversification across loans and platforms due to both loan specific risks and platform risk”.
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