New Financial Conduct Authority (FCA) regulations come into effect on 9th December 2019 to ensure investors enjoy the full benefits of a well-run peer to peer (P2P) lending sector.
As a result of the new regulations, new rules come into place to tighten up standards across the P2P industry to ensure transparency, responsibility and greater governance regarding risk and an ensuring of customers’ understanding of the risks involved.
The P2P sector is broad with multiple platforms offering varying degrees of risk, return and service. FOLK2FOLK supports the raising of standards within the industry and welcomes these regulatory changes.
How does this impact our investors?
From 9th December 2019:
- All new investors via peer to peer (P2P) lending platforms are required to take an ‘appropriateness test’ to check their understanding of the risks involved in P2P lending. At FOLK2FOLK we have created a short seven question ‘Understanding The Risks’ questionnaire to achieve this.
- Platforms will also need to categorise their investors according to the FCA’s four investor classifications. Categorisation will be based on level of investment experience and understanding. At FOLK2FOLK we will ask our customers to choose the category that best describes them.
- Existing FOLK2FOLK investors will need to complete our ‘Understanding the Risks’ questionnaire and categorise themselves prior to re-investing or adding further funds to our platform.