Rebuildingsociety urges FCA not to block retail access to P2P
Rebuildingsociety has claimed that while protecting investors from malicious or fraudulent investments, it would be a “shame” if the City regulator were to block retail investors from peer-to-peer lending investments.
The Financial Conduct Authority (FCA) published its regulatory initiatives grid on Monday 1 November, which confirmed that it expects to publish its consultation paper on financial promotion rules for high-risk investments in the fourth quarter of this year, with a policy statement to follow in the second quarter of 2022.
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The regulator is looking to strengthen financial promotion rules for high-risk investments, in which it includes P2P lending, because of concerns that everyday investors do not properly understand the risks involved.
Last month, the FCA published a three-year strategy to enhance consumer protections, in which it said it is aiming to halve the number of consumers putting money into high-risk investments who indicate a low risk tolerance or demonstrate characteristics of vulnerability.
P2P lending platforms have criticised FCA proposals, claiming that they unfairly lump regulated P2P investments in with unregulated products such as cryptocurrencies.
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Rebuildingsociety said that the platform already has a classification process and appropriateness test for lenders and that these are continually reviewed.
The platform said while protecting investors, the FCA should support innovation and competition and that it would be a shame if retail investors were blocked from accessing P2P investments.
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“Rebuildingsociety was one of the first regulated P2P lending platforms in the UK,” the platform said in a blog on its website.
“Following the post-implementation review in 2019, the firm, along with all other P2P platforms in the UK, implemented the mandatory lender classification process and lender appropriateness tests, and has continually reviewed and edited these to incorporate the changing nature of the risks faced by lenders.
“Protecting consumers from malicious and inherently fraudulent investments must be a priority of the FCA.
“That being said, the regulator must also ensure that it meets its objectives of promoting innovation and competition in financial services.
“It would be a shame that if, in its delivery of its strategic plan to provide better protection to consumers, the regulator made access to investing and investments inaccessible to the everyday investors who benefit from access to investment platforms such as Rebuildingsociety and other P2P lending platforms.”