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Post by Deleted on Feb 9, 2015 21:07:28 GMT
Does anybody know what it actually means, in term of practical measures?
Does the FCA perform some frequent checks/audits of the regulated platforms?
Site visits?
Vetting of directors?
That the loans actually exist?
That the cash is indeed held in a segregated fund?
That some arrangements are indeed in place to transfer the loan book to another party in case of issues?
That the relevant back office processes are appropriate for keeping an accurate record of who owns which loans?
That IT is relevant, secure, backed up etc?
etc.
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Post by wiseclerk on Feb 9, 2015 21:08:33 GMT
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sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Feb 9, 2015 22:52:16 GMT
The problem with regulation is that when it get's enforced it's too late for those who are already invested.
I had an FSA regulated investment. The FSA won a court case against the regulated company. The company immediately chose voluntary administration. Then the administrators racked up monstrous costs and the investment is frozen for months or years. It was FSCS protected, but the investment was worthless by the time they chose to pay out.
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adrianc
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Post by adrianc on Feb 9, 2015 23:10:50 GMT
There's always examples of poor or late regulation - but, on the whole, being regulated HAS to be better than being unregulated.
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adrianc
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Post by adrianc on Feb 10, 2015 10:46:45 GMT
Are we talking about "regulation-the-concept", or are we talking about "FCA-the-reality"?
Like I said - there's always examples of poor regulation. How the current reality squares up to optimistic-utopian-ambition - or even bare-minimum-competence - is, imho, separate from whether the concept is desirable or not, and that's the first question that needs answering. If there's no need for regulation-the-concept, then the reality is irrelevant, because it shouldn't be there in the first place.
My point was that regulation-the-concept is necessary. Without it, the financial markets (of any stripe) would be a free-for-all sharkpit, with unthinkable consequence for the financially-driven global civilisation we all live in.
If we agree on that, then the question becomes one of whether regulation-the-concept should apply only to "traditional" financial markets and products, or why we think that AltFi or P2P/Crowdfunding/whateveryouwanttocallit is somehow inherently special and more trustworthy than any other financial market. It isn't. It might currently be, but that's really only because we haven't been deemed worthy of the attentions of the scammers and sharks as yet. When we do, then Joe Public needs and deserves the attention of the regulator.
Like I said - whether that regulator is competent or not is another question, and one that applies across all markets, again not just us.
We were on the receiving end of the traded life fiasco. Fortunately, through one of the reputable "innocent victims", and it's all now getting unwound - but it's taking years. So, yes, I can certainly appreciate the argument for incompetence... Do I even begin to understand the bigger picture well enough to pronounce on the question of institutional incompetence, or a solution? Nope.
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bugs4me
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Post by bugs4me on Feb 10, 2015 22:26:01 GMT
There's always examples of poor or late regulation - but, on the whole, being regulated HAS to be better than being unregulated. I beg to differ. The FCA's primary mission is currently to manage it's own survival. It's changed its name (again!) to try to distance itself from what happened when it was the FSA (or previously the SFA). The regulation is totally backward looking, always trying to protect people from the last crisis; never attempting to foresee the next crisis. The regulation it imposes causes many unintended consequences. The cost burden reduces returns. I t drives consolidation as it favours large corporates over small businesses. The financial burden of recent FCA regulation makes small businesses in many financial sectors now almost unviable. This reduces choice and impairs innovation. Terror of violating FCA regulations makes companies defensive so they curtail the choice of products to "safe" ones. The idea that regulation is somehow a "free option" is nonsense. We pay for that option in a number of ways. The question we always need to ask is whether the protection provided by regulation is worth the costs incurred. Couldn't agree more. When we were regulated by the old FSA they paid us one 'arrow' visit. Between the three of them they had one business card. They had a list of general questions which we answered so I guess all the box's were ticked. Then they asked to see our computer systems. That was fun as you could see their eyes glaze over when talking to our IT guy - they simply didn't understand. They made one recommendation which if we had implemented would have put us at a disadvantage with our competitor companies. Was this mandatory I asked. Nope was the reply so nothing happened. Meanwhile, the big fish, say no names, they didn't go anywhere near. Plus the turnover of staff at the old FSA was apparently in accordance with the industry standard of 10% per annum. What they failed to mention was that 40% of their staff were not staff at all but folks engaged on short term contracts. So you never got to speak to the same person more than once. After all the financial disasters they then managed to reward the head of the FSA with a knighthood. As far as I'm concerned, same staff mentality with a different name. Rant over!!!!!
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Post by yorkshireman on Feb 11, 2015 11:04:14 GMT
Bu**er All, Sweet FA, zilch, zip, nada.
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bob76
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Post by bob76 on Feb 12, 2015 7:12:18 GMT
Sounds like "regulated by the FCA" means very little in reality then. No proper audits done, not proper checks performed.
I think I am going to stick to the big players for now, or those who also get public money funding, like Funding Circle.
The small player probably ought to let their investors perform some random audits, or let some large auditing companies like PWC do some periodic audits, and post their reports online.
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bigfoot12
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Post by bigfoot12 on Feb 12, 2015 9:28:28 GMT
Sounds like "regulated by the FCA" means very little in reality then. No proper audits done, not proper checks performed. I think I am going to stick to the big players for now, or those who also get public money funding, like Funding Circle. The small player probably ought to let their investors perform some random audits, or let some large auditing companies like PWC do some periodic audits, and post their reports online. I think it is bare minimum (for the UK outfits) rather than anything else. You should go to the FCA website and check the number rather than simply accept a statement on a website. The problem with PWC audits is that they would be expensive. And P2P has to run on very thin margins or it doesn't work. I think that sticking to the larger established players is very wise. Also many people report their experiences on this forum. Obviously you can't be sure they are unrelated.
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