NextFin Discusses How P2P Platforms Will Need to Comply with the New FCA Crowdfunding Rules

LONDON, Dec. 6, 2019 /PRNewswire/ -- The Financial Conduct Authority (FCA) rules, PS19/14, are coming into force on 9th December 2019 which call for platforms to be transparent.

Embracing the new rules is an opportunity for the industry to grow consumer confidence and increase profitability for platforms.

"Ahead of Dec 9th less than an estimated 10% of P2P platforms are publishing unfettered loan books, where as 90% are publishing selective loan data or no data at all," says Sacha Bright CEO and founder of Nextfin.co.uk the UK's P2P & Equity crowdfunding aggregator.

"As a regulated professional whom is trying to compare platforms. It is difficult to find the information needed to compare one platform over another. If an industry professional such as myself cannot find the data required to compare, how can we expect retail investors to do it."

To create a level of transparency and comparison across all platforms, every P2P site should be publishing a full unbiased loan book to allow professional advisors and rating organisations such as NextFin to analyse the integrity & potential of the investment opportunity.

The FCA support this and this is why the new rules re-enforce the need for transparency however it would appear ahead of the rules coming into force on December the 9th a limited few are publishing unbiased loan books and the majority are deciding to present extracts which present themselves in the best light.

The new rules specifically quote that sites should provide information to help prospective investors to compare investments across different platforms. The question is post December 9th will platforms be breaking the rules by not publishing their full loan books for comparison.

Extract from The FCA Rule:

The investment - to ensure that investors are provided with relevant information about an investment, to improve transparency of the fees and platform charges for the services provided, and to help prospective investors compare investment opportunities across different platforms. This included:

• ongoing disclosures – to ensure that, at any point, customers can access details of each P2P agreement they have entered into
• outcomes - where a platform sets the price (pricing platforms and discretionary platforms), it must publish an 'outcomes statement', which includes:
• the expected and actual default rate of all P2P agreements by risk category
• a summary of the assumptions used in determining expected future default rates
• the actual return achieved (where a platform offered a target rate) future default rates

If transparency is fully embraced under the spirit of the new FCA crowdfunding rules across the industry, undoubtedly consumer confidence will grow benefiting all platforms. To view and compare the equity and debt crowdfunding market visit www.nextfin.co.uk

For further enquiries contact:
Sacha Bright 
info@nextfin.co.uk
+44-(0)-1920-486440