The FCA today published a statement on peer-to-peer applications for full authorisation. The FCA stated that “this is a young and innovative market and it expects the Innovative Finance ISA, which launches on 6 April, to further increase consumers’ awareness of peer-to-peer lending (P2P). The FCA is keen to promote effective competition in this market.
We are taking a proportionate approach to regulation, recognising the need for consumers to be adequately protected and have the information they need.”
The FCA further highlighted the importance that applications from firms wishing to be fully authorised are properly considered and that the firms meet rigorous statutory standards. The regulator also pointed to the recent changes to legislation which clarify how operating a P2P platform fits with other regulated activities, which came into effect in January and mid-March 2016.
As of 30 March 2016, eight firms have been fully authorised to operate P2P platforms. There are a further 86 firms awaiting a decision, of which 44 have interim permission. Firms with interim permission were previously licensed by the Office of Fair Trading, which regulated consumer credit before the FCA, and are able to continue carrying out consumer credit activities until we decide whether to fully authorise them. Only P2P loans on platforms operated by firms with full authorisation will be eligible investments for the Innovative Finance ISA.
The full FCA statement can be found here.