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Post by mrclondon on May 28, 2016 11:12:34 GMT
I have moved (and only very slightly edited) my post on potential FCA regulatory impacts on how platforms interact with this forum from the thread I originally posted it in, and have added it below this post.
I am, at present, not aware of any impact on those forum members who are solely shareholders, investors, lenders or borrowers of a platform.
There are however potential implications for those forum members who are within the scope of the FCA's definition of an "employee" (Handbook Glossary G365) of a regulated financial services business, namely someone:
"1(a) who is employed or appointed by a person in connection with that person's business, whether under a contract of service or for services or otherwise; or
(b) whose services, under an arrangement between that person and a third party, are placed at the disposal and under the control of that person;"
Ever since the forum was launched, forum staff have interpreted that definition as encompassing all directors (exec or non-exec), employees, consultants and contractors of a platform and those third-party individuals acting as loan introducers/originators on platforms. The forum rules require that all forum accounts operated by such individuals are identified as having a relationship with the relevant platform(s). Forum staff will not permit any exceptions to this rule, and should any such individuals disagree, they are advised to delete their forum account.
If the forum member wishes to identify their posts as being their own personal opinion and not a formal view of the platform there are two obvious ways in which this could be done:
1. On a post by post basis by making that statement within the post
2. By putting such a statement in the automatic signature of their account so it appears every time.
There have been some comments as to whether the current "Representative of platform xyz" or "Associate of platform xyz" are the most appropriate descriptors. Forum staff are not wedded to the words Representative/Associate and providing there is consensus amongst the platforms' compliance teams that other words would fit better, this can be changed.
I have locked this thread as commentary on this subject is best reserved to those compliance experts who have a good working knowledge of FCA Guidance.
We strongly recommend that any director (exec or non-exec), employee, consultant or contractor of a p2p platform or a loan introducer / originator who has a forum account that is not currently flagged as a representative or associate should send Admin a PM to discuss the matter further, rather than wait for us to become aware of the fact by other means.
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Post by mrclondon on May 28, 2016 11:19:52 GMT
A recent post by a platform representative referred to the fact that forum staff are currently engaging with platforms behind the scenes in a discussion to help both platforms and forum staff understand what if anything needs to change in the way platforms interact with the forum, and/or how the forum is managed to reflect the reality that p2p platforms are FCA regulated (which of course they weren't when the forum launched back in 2013).
A lot of the FCA guidance, particularly on market conduct is obtuse, and has not as yet been updated to reflect P2P's idiosyncrasies vs savings and investments. The FCA's P2P guidance is standalone and fairly limited in scope, but refers back to the wider body of published FCA guidance.
The FCA guidance document (FG15-04) on regulated financial services companies use of social media includes this explanatory footnote:
"If an employee of a firm uses their personal social media account to send communications that could be considered an inducement or invitation, then this may constitute a financial promotion and may therefore be subject to the same rules that apply to the firm. In this instance the employee (the communicator) may be acting in the course of business because they have a commercial interest in the communication (i.e. they are trying to obtain more clients/business for their employer). If, however, the employee sends a genuine non-business communication or indeed the conversation involves groups and individuals not acting in the course of business, then this would fall outside our regulation."
The danger is a tired employee makes a social media post using their personal social media account without sense checking the extent to which their post could be considered an invitation to lend on their own platform. The forum rules and any changes we make in the future are intended to help protect all forum members from unintended legal/regulatory concerns whether they are individual members, forum staff or are officers/employees etc of platforms.
As a reminder, the FCA definition of "employee" is available in the FCA Handbook Glossary (G365)
The platforms and forum staff need to work together on this, and base discussion on the published regulatory guidance not emotional reactions. The forum staff believe that this is in the best long term interest of all forum members, to allow platforms to justify that their continued usage of this forum is compliant with FCA guidance (which admittedly is still evolving).
We have started this dialog with a few platforms (we are volunteers managing this forum in our own time, with no financial recompense so our time is limited). If those platforms that haven't been contacted by us (yet) wish to get involved sooner please PM me. Likewise if any forum member has a good working knowledge on the FCA's market conduct guidance and can assist with developing the framework in which platforms interact with this forum please get in touch.
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