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Post by westonkevRS on Oct 10, 2015 10:00:24 GMT
Comrades, Open and frank interview with Christine Farnish the P2P FA chair: www.lendacademy.com/podcast-48-christine-farnish-of-the-uk-p2p-finance-association/What is interesting to me was the fact nearly 120 P2P platforms have been operating under interim FCA authorisation. Rhydian the RateSetter CEO has discussed that our full application will cost us around half a million quid, so it'll be interesting to know how many of the 120 platforms have the resource and cash to complete the application. Ms Farnish on the podcast estimates that actually only 20 to 40 platforms will complete the authorisation process. Now is the time that some platforms will be throwing in the towel, and I think we've seen that already with Trillion (although they blamed renewables lack of support from the government). So bets are on, how many P2P platforms will be FCA authorised by Q2 2016? I'll hazard a guess at 35.... westonkevRS |
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bigfoot12
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Post by bigfoot12 on Oct 10, 2015 10:24:18 GMT
Thanks for the link. My guess is that some of the companies will be hoping to spend less - for the big companies it isn't worth the risk of it going wrong and so worth spending a lot.
Having said that I'm guessing lower - 25.
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ben
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Post by ben on Oct 10, 2015 10:31:27 GMT
I would think a lot of the companies will not 1/2 a million to spend on this.
Is the 1/2 million due to size or what it would cost whatever size you are.
On the assumption it would cost around half that on average I would go with about 15
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registerme
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Post by registerme on Oct 10, 2015 11:09:30 GMT
Interesting, thanks for posting that kev. I was amused when she said "all of our members will sail through the FCA process". If it's half as rigorous as she implies suspect it may not be quite so easy. I wonder will the FCA talk to any customers?
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Post by ablrateandy on Oct 10, 2015 11:42:24 GMT
A lot of the cost is a scale issue imho.
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Post by wiseclerk on Oct 10, 2015 12:07:12 GMT
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Post by gmaxkenny on Oct 10, 2015 13:05:03 GMT
Having an FCA licence is nothing more than a figleaf and a way for government to screw money from platforms for which we investors will pay for. If an FCA licenced platform goes under for any reason including fraud we will soon find out who useless it is. The usual "lessons will be learned" and "it must never happen again " platitudes will be trotted out and as usual the investors will be left to pick up the pieces while the regulators will wash their hands of it.
To investors an FCA licence is about as useful as a condom to a eunuch in a harem.
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registerme
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Post by registerme on Oct 10, 2015 13:10:32 GMT
From the transcript of the podcast:-
Christine: Yeah, they knew it was coming, exactly so a lot of people got it on a precautionary basis and they're not really doing any business, of course, as you would expect. What's now happening and what is happening right now and is going to go on until Easter we think so there is sort of a six month period of intensive activity by the FCA where all of us have to now apply for full permission to do our business and the FCA crawls all over you, as they should, making sure that your systems have passed, that your controls, your risk management is strong, that you've got properly competent people running the business, that you've got all the things that their regime requires. They check it all, they visit, they require lots and lots of information. It's a thorough process and hopefully, the platforms will come out the other end with their full permanent authorizations to do business in the UK. I'm sure all of our members will sail through that process. There could well be some other platforms out there where the FCA says...no, sorry, you're not going to get the permission or you've got to do more work, come back next year. We don't know yet.
(my emphasis)
How many of us forum denizens are as confident as she is?
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jimbo
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Post by jimbo on Oct 10, 2015 14:01:19 GMT
I'm in gmaxkenny's camp when it comes to the FCA, so I suspect Christine Farnish's opinion will be correct. When it comes to their 'regulation' of the AIM market, the FCA are about as much use as a chocolate teapot in my opinion. There is plenty of documented abuse on the following site, along with open letters to the FCA, and they have done nothing: shareprophets.com/I appreciate this has little to do with P2P, but given the failure of the FCA to enforce established rules pertaining to market abuse, I personally have no faith in them to effectively regulate P2P... |
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Post by meledor on Oct 10, 2015 14:50:11 GMT
If Ratesetter is spending £0.5m on FCA authorisation then the options are:
-It is an overly complex platform -It is using expensive consultants -The FCA regulations are excessively burdensome and the chairman of the P2PFA, Christine Farnish, has failed to kick up a fuss about it.
It could be a mix of all three. I would expect the cost of compliance to be higher for those platforms which promote themselves as lower risk through the use of a substantial provision fund where the security of that fund depends on the creditworthiness assessments conducted by the platform itself as opposed to platforms with borrowers offering higher returns but, other than the reputation issue for the platform, most of the credit assessment is expected to be undertaken by the lender.
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registerme
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Post by registerme on Oct 10, 2015 20:47:40 GMT
One thing I think is worth clarifying / asking westonkevRS about is whether the cost he quoted is:- 1. specific to RateSetter, because of the current shape of their business 2. a flat charge for all P2P businesses My expectation, given his comment that "Rhydian the RateSetter CEO has discussed that our full application will cost us around half a million quid", is that this is more akin to a company responding to a 166 (not that I am suggesting that RateSetter is subject to a 166) than it is to a simple upfront fee. In other words that various P2P comanies could face different costs because their circumstances are different. Though, to be sure, there will likely be a baseline cost across all. Kev, can you confirm / deny / correct? Cheers, RM |
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ben
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Post by ben on Oct 10, 2015 21:15:52 GMT
It would also be interesting to see how much the other site think it would cost them
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registerme
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Post by registerme on Oct 10, 2015 21:50:54 GMT
To take ben 's point further. Let's ask them. Please would all P2P sites, members of the UKP2PFA and otherwise, respond to this thread with their expectation of the costs they will accrue meeting FCA authorisation? |
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james
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Post by james on Oct 11, 2015 8:59:42 GMT
I wonder will the FCA talk to any customers? They would be grossly negligent if they didn't. Direct communication with sampled (not nominated) customers is a key part of the vital fraud prevention checking that customers actually exist. Otherwise a platform could invent fake borrowing customers as part of stealing money.
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JamesFrance
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Post by JamesFrance on Oct 11, 2015 9:24:45 GMT
I'm in gmaxkenny's camp when it comes to the FCA, so I suspect Christine Farnish's opinion will be correct. When it comes to their 'regulation' of the AIM market, the FCA are about as much use as a chocolate teapot in my opinion. There is plenty of documented abuse on the following site, along with open letters to the FCA, and they have done nothing: shareprophets.com/I appreciate this has little to do with P2P, but given the failure of the FCA to enforce established rules pertaining to market abuse, I personally have no faith in them to effectively regulate P2P... Me too, bureaucrats and politicians always add considerable cost to anything they interfere with, but rarely add any value.
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