Zoopla-backed Landbay and agents raising funds could all face changes in FCA crowdfunding overhaul

Zoopla-backed peer-to-peer lender Landbay could face further regulation as part of regulatory changes the Financial Conduct Authority (FCA) is looking to introduce in the P2P and crowdfunding sector.

The City watchdog has released a consultation on improving transparency and disclosure in the peer-to-peer and crowdfunding sector.

One proposal is to expand mortgage regulation rules to P2P platforms offering home finance such as buy-to-let loans and development or bridging products.

This could impact alternative property lenders such as Landbay if it were to move into the residential mortgage space. However, John Goodall, chief executive of Landbay, said there are no such plans currently.

They would have to follow mortgage rules on fee and interest rate disclosure, treatment of customer arrears, provide transaction data to the FCA and apply tough affordability assessments used by mainstream lenders.

The document also reminds crowdfunding platforms – which have become popular for agency brands such as Emoov as well as proptech firms to raise funds – of the importance of ensuring investors can afford to get involved in projects.

Platforms must ensure anyone pledging money is certified as high-net worth or sophisticated investors, or commit to not investing more than 10% of their net investable portfolio.

The FCA said: “We have become aware that there may be some confusion amongst investment-based platforms in particular about the level of checks required in relation to an investor’s certification, particularly in relation to high net worth investors.

“We are not proposing to prescribe what specific checks or evidence gathering a platform must undertake.

“There are a number of ways in which a platform can take reasonable steps. In designing their processes, platforms should consider what constitutes a meaningful self-certification in the context of the business model and the type of interaction they have with the underlying customer.

“For example, we accept that for many platforms it may not be reasonable to check investors’ payslips to evidence their net worth, but there may be some circumstances where a platform concludes this is appropriate. However, a process that could lead to a customer inadvertently making an inaccurate certification would not be sufficient.”

https://www.fca.org.uk/publication/consultation/cp18-20.pdf

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