PS16/8: FCA Handbook changes regarding the segregation of client money on loan-based crowdfunding platforms, the Innovative Finance ISA, and the regulated activity of advising on peer-to-peer agreements

Published: 21/03/2016     Last Modified: 21/03/2016

This policy statement summarises and gives our response to feedback to CP16/4: Loan-based crowdfunding platforms and segregation of client money and CP16/5: FCA Handbook changes to reflect the introduction of the Innovative Finance ISA and the regulated activity of advising on peer-to-peer agreements. We also publish the rules and guidance that will come into force on 21 March 2016 in relation to the CP16/4 proposals and  6 April 2016 in relation to the CP16/5 proposals, coinciding with the date the IFISA is introduced.

Why are we publishing this policy statement?

In April 2016 the Government will introduce the Innovative Finance ISA (IFISA), which will allow for peer-to-peer (P2P) agreements to be included within an ISA tax wrapper. Changes to legislation will also make advising on P2P agreements a regulated activity.

To take account of these legislative changes, we published a discussion paper in November 2015 and a consultation paper in February this year setting out proposed changes to the FCA Handbook.

We published a separate consultation paper in January 2016 with proposals to change our client money rules for firms that operate electronic systems in relation to lending (P2P platforms) and hold both money for clients in relation to regulated P2P agreements under our client money rules (CASS 7) and money for clients in relation to unregulated lending.

We are now issuing this policy statement to finalise our rules and guidance on client money, disclosure and advice relating to P2P agreements.

PS16/8: FCA Handbook changes regarding the segregation of client money on loan-based crowdfunding platforms, the Innovative Finance ISA, and the regulated activity of advising on peer-to-peer agreements [PDF]

Who should read this paper?

This policy statement will be relevant to consumers and consumer organisations with an interest in the loan-based crowdfunding sector. It will also be relevant to trade bodies and compliance consultants that have aligned stakeholder interests.

The rules in this paper apply to:

  • firms that operate or plan to operate peer-to-peer (P2P) or peer-to-business (P2B) lending platforms on which consumers can invest in P2P agreements
  • firms that plan to manage IFISAs
  • firms that plan to offer regulated advice to consumers in relation to P2P agreements
  • firms that operate electronic systems in relation to lending (P2P platforms) and hold both regulated and unregulated client money accounts

Next steps

The new and amended rules and guidance will come into force on 21 March 2016 in relation to the proposals under CP16/4 and 6 April 2016 in relation to the proposals under CP16/5 to coincide with the introduction of the IFISA. Firms should consider if they are affected by this policy statement and make the necessary changes.

Further information

For queries relating to this Policy Statement please email cp16-05@fca.org.uk.

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