Regulatory considerations When investing in P2P lending and crowdfunding

Gillian Roche-Saunders Partner, Bates Wells Braithwaite LLP

Deciphering the landscape

Platform requirements P2P Debt / Equity

FOS Yes Yes

FSCS No Yes

Provision fund Potentially No

Living wills Yes No

Client money Yes Yes

Managing permissions No Yes

Advising permissions Yes Yes

Appropriateness & self certification No

Yes

Questions to ask

Platform

• “Skin in the game”

• Level of due diligence

• Quality of the team

• Processes for credit assessments / valuations

• Regulatory status

Product

• Information available

• Type of borrower

• Creditworthiness of borrower

• Unsecured / secured

• Rights & protections

IFISA

P2P loan = platform fully authorised by FCA

Debt security = platform with arranging permissions (authorised, AR, or passporting)

Platforms running IFISAs

Aggregator platforms / traditional ISA managers

IFISA product

IFISA managers

Platforms making IFISA-able product

Offered by a firm that is fully authorised by the FCA, or passporting.

HMRC approved

Direction of travel

Some re-routing and speed limits, but a variety of models still moving forward

Different DD needed on bonds and P2P

Even within one category, platforms differ

Understand business model and underlying product

IF ISA launches and FCA regulatory review will create new opportunities…

….Market will keep evolving for some time yet

Take aways

More about us

Gillian Roche-Saunders is a Partner at the firm and heads the BWB Compliance team.

She specialises in advising alternative finance firms and has worked with over 40 platforms, as well a wide range of firms in the venture capital, wealth management and corporate finance sectors.

Gillian is a Director of the EIS Association and chairs its regulatory committee. She also provides regulatory support to the UK Crowdfunding Association.

Gillian is known for her ability to find compliance solutions that take into account commercial as well as regulatory realities. Her work has led to a string of awards and she herself won Best Compliance Consultant for Regulatory Strategy at the Compliance Register Awards 2015.

Email:

g.roche-saunders@bwbllp.com

LinkedIn:

uk.linkedin.com/in/gillianrochesaunders

Twitter:

@GillianR_S

More about us

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