Post by sand2880 on Feb 5, 2015 13:41:54 GMT
Interesting read from the FCA:
fca.org.uk/your-fca/documents/crowdfunding-review
Summary from bovill:
Loans-based platforms
The comparison of loans to savings accounts remains an issue for the FCA. As the recent NESTA report highlighted that investors use money for savings for P2P products, the FCA will continue to take action against firms using such comparisons in their marketing.
Interestingly, the FCA warns that if the risk profile of products on loans-based platforms reaches a comparable level to those on investment-based platforms, it will apply similar restrictions to financial promotions and investor take on
The FCA highlights issues where:
loans are compared to savings accounts
APR is missing or hidden
tax on investments is not explained
risk of borrowing is insufficiently clear.
Platforms seeking authorisation
Some failures referred to in the review were obvious, such as incomplete forms and asking for unnecessary permissions. However other trends identified suggest that new entrants are underestimating the FCA’s requirements:
The FCA highlights issues where:
business plans are too commercial
technology is not sufficiently developed
the team lacks the right experience
capital requirements cannot be met without fundraising.
The FCA is currently investigating platforms who are operating without being appropriately authorised.
fca.org.uk/your-fca/documents/crowdfunding-review
Summary from bovill:
Loans-based platforms
The comparison of loans to savings accounts remains an issue for the FCA. As the recent NESTA report highlighted that investors use money for savings for P2P products, the FCA will continue to take action against firms using such comparisons in their marketing.
Interestingly, the FCA warns that if the risk profile of products on loans-based platforms reaches a comparable level to those on investment-based platforms, it will apply similar restrictions to financial promotions and investor take on
The FCA highlights issues where:
loans are compared to savings accounts
APR is missing or hidden
tax on investments is not explained
risk of borrowing is insufficiently clear.
Platforms seeking authorisation
Some failures referred to in the review were obvious, such as incomplete forms and asking for unnecessary permissions. However other trends identified suggest that new entrants are underestimating the FCA’s requirements:
The FCA highlights issues where:
business plans are too commercial
technology is not sufficiently developed
the team lacks the right experience
capital requirements cannot be met without fundraising.
The FCA is currently investigating platforms who are operating without being appropriately authorised.
