In this paper we set out some of the recent developments across the crowdfunding sector and a number of concerns that we have identified in response. We want to gather feedback from all interested parties relating to the crowdfunding sector.
Why we are publishing this paper
In 2014, new rules came into force for the regulation of crowdfunding platforms operated by firms authorised by us. We committed to carry out a full post-implementation review of the crowdfunding market and regulatory framework in 2016 to identify whether further changes are required.
In it we summarise some of the market developments we have seen recently and some of our current concerns to help structure the conversation.
Over the coming months we will also work with firms and carry out additional research into the market to inform the review.
Who this applies to
This paper will be of interest to:
- consumers and consumer organisations with an interest in the investments offered on crowdfunding platforms, and similar investment offers such as the marketing of mini-bonds
- firms that operate or plan to operate peer-to-peer (P2P) lending platforms or peer-to-business (P2B) lending platforms (which we refer to as loan-based crowdfunding platforms in this paper) on which consumers can invest in loan agreements (which we refer to as P2P agreements)
- firms that operate or plan to operate investment-based crowdfunding platforms on which consumers can buy investments, such as equity or debt securities securities (such as bonds or debentures) that are not listed or traded on a recognised exchange, or units in an unregulated collective investment scheme
- firms that market non-readily realisable equity or debt securities to retail clients outside of online investment crowdfunding platforms
- firms that compete for business with P2P lenders
- consumers and businesses that have entered into, or plan to enter into, P2P agreements as borrowers
This call for input has now closed. We will consider your feedback and use it to inform our work where appropriate in the coming months.