Seedrs Blog

FCA review of crowdfunding regulation

FCA review of crowdfunding regulation

12th December 2016 by Karen Kerrigan

The FCA has published an interim feedback statement following its September 2016 Call for Input. This was the first step in the anticipated post-implementation review of the crowdfunding rules that were introduced by the FCA in 2014. The next step is market research, and we would very much appreciate it if you would participate in this research by completing one of the following surveys:  

The FCA’s review covers both investment-based crowdfunding (including equity), and loan-based crowdfunding (also known colloquially as “peer-to-peer lending” or “P2P”), which are subject to separate regulatory regimes. Unlike equity crowdfunding, P2P was not regulated by the FCA before 2014 and, over the last two years, P2P platforms have been working through the authorisation process. It is therefore unsurprising that the main focus of the FCA’s review is the regulation of P2P – with particular attention on how the regulator can keep up with the pace of change in that sector.

With regards to equity crowdfunding, the FCA is not proposing to take any immediate steps to change regulation. However, it does plan to further consider certain areas of the current regulatory regime – namely, potential conflicts, standards of disclosure, due diligence and investor appropriateness – to determine whether any changes would be appropriate.  

Seedrs fully supports this work and we will continue to engage with the FCA in its review. We were the first equity crowdfunding platform to be authorised by the FCA (then, the FSA), back in 2012. Since then, we have worked hard, not only to maintain high standards of regulatory compliance ourselves, but promote them across the industry. We therefore welcome the FCA’s efforts to continue to improve the regulatory regime, and we very much hope this will help Britain maintain its position as the world-leading market for equity crowdfunding.

Karen Kerrigan

I'm Chief Legal Officer for Seedrs and a Director of the UK Crowdfunding Association.

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