PS19/14: Loan-based (‘peer-to-peer’) and investment-based crowdfunding platforms: Feedback to CP18/20 and final rules

Read PS19/14 (PDF)[2]

We are introducing a package of rules and guidance to improve standards in the sector.  In summary, this PS confirms that we are:

• Introducing more explicit requirements to clarify what governance arrangements, systems and controls platforms need to have in place to support the outcomes they advertise. 
• Strengthening rules on plans for the wind-down of P2P platforms. 
• Applying marketing restrictions to P2P platforms, designed to protect new or less-experienced investors. We have also clarified the practical implication of these new rules as they apply to P2P agreements. 
• Introducing a requirement that an appropriateness assessment (to assess an investor’s knowledge and experience of P2P investments) be undertaken, where no advice has been given to the investor. We have also provided guidance on what the assessment should include.
• Setting out the minimum information that P2P platforms need to provide to investors.  
• Applying the Mortgage and Home Finance Conduct of Business sourcebook (MCOB)[3] and other Handbook requirements to P2P platforms that offer home finance products, where at least one of the investors is not an authorised home finance provider.

Who this applies to​​

This Policy Statement will be of interest to:

• P2P platforms (and firms providing services to P2P platforms)
• investment-based platforms, and other firms offering non-readily realisable securities
• trade bodies for these sectors
• consumers and businesses investing or considering investing through an online crowdfunding platform or in non-readily realisable securities 
• consumers and businesses that have entered, or plan to enter, into loan agreements as borrowers via P2P platforms 
• intermediaries who might refer home finance customers to P2P platforms
• consumer organisations

Next steps

The new rules and guidance will come into force on 9 December 2019, with the exception of applying MCOB to P2P platforms that offer home finance products, which comes into force on 4 June 2019.

If your firm is affected by the final rules and guidance detailed in this Policy Statement, you must consider what changes you need to make to ensure you have implemented necessary changes by these commencement dates.