The Financial Conduct Authority (FCA) is bringing in new rules to regulate the peer-to-peer sector just a week after crowdfunding marketplace Lendy called in administrators, reported the Financial Times.
The regulator is putting a limit in place so that retail investors can only invest a maximum of 10% of their portfolio in peer-to-peer. This will stop investors “over-exposing” themselves to risk, the FCA claims. This restriction will not apply to retail customers who have received regulated financial advice, however. Where investors have not received advice, P2P platforms will have to assess customers’ “knowledge and experience” of peer-to-peer investments.
The FCA had been widely expected to bring in these rules after warning of the risks in April. It stated at the time that investors often do not know what they are putting their money into and they may not be covered by the Financial Services Compensation Scheme (FSCS).
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
