News Briefing - Crowdfunding, SME And Alternative Finance

A lady at the counter talking to a bank teller

1.UK – FinTech

Crowdfund Insider reports on developments at a crypto-platform.

 

Aave, a UK-based tech company which specializes in the development of decentralized and hybrid blockchain applications, announced on Wednesday the launch of bitcoin on its crypto lending marketplace platform, ETHLend.

According to Aave,  ETHLend is a lending peer to peer marketplace where users can borrow money using their crypto assets as collateral. Aave reported that ETHLend had a lending volume generated of $20 million last year.”

2. UK - SMEs

Out-Law the comms platform for law firm Pinsent Mason, runs a piece on the regulatory preparedness of SMEs ahead of Brexit.

“The UK’s Financial Conduct Authority has issued guidance for the firms and individuals it regulates ahead of Brexit, clarifying the areas where preparation is needed to meet new regulatory obligations.06 Feb 2019

In this situation the authority said it intended to use the power that would be granted to it in the currently draft legislation published by the Treasury to ensure that firms and other entities did not "generally" need to prepare now to meet changes to their obligations connected to Brexit.

The temporary transitional power would give the FCA the ability to delay or to phase in changes to regulatory requirements for a period of two years from exit day, currently scheduled for 29 March 2019.

Despite this, the FCA said there were a number of areas where firms did need to begin preparations for the UK's withdrawal from the EU, as it would not be consistent with its statutory objectives to grant transitional relief.”

FCA sets out expectations for firms ahead of Brexit

3. UK – P2P

 

FTAdviser.com looks at the FCA’s scrutiny of P2P platforms.

“P2P was presented by politicians as a way to upend the lending market while providing a better return for investors.

However, recently the Financial Conduct Authority has raised concerns about some operators in the P2P sector and eyebrows raised about whether some investors grasp the risks associated with this type of investment.

The regulator found that a fifth of investors had put more than double their annual income into platforms that often failed to fully explain the risks involved.

The FCA is now looking into whether it should be made harder for regular retail investors to fund loans.

So, what does the future hold for P2P lending and what clients should advisers consider it for as a source of income?

At a recent FTAdviser masterclass, sponsored by Octopus Investments, industry experts and advisers gathered to discuss how advisers can make sure they pick the most suitable P2P proposition for their client and what providers could run into problems if markets take a tumble.

Damian Webb, a partner at RSM Restructuring Advisory, pointed out the term P2P covers a wide range of types of underlying investment in assets, individuals and providers operating in many different ways.

Mr Webb said: “When this market started in 2008, followed by the global collapse in interest rates, there was a requirement for many retail investors for a search for yield.

“With [P2P] and the development of technology, you could now access the market that you couldn’t do previously.

“Before, you had regional banks which had access to deposits, but with the internet, now you have a tool that could access this capital.

“What you did see at that point in time was a huge amount of retail money accessing the sector, but what you also saw were significant inconsistencies in [provider] practices during this period of time in 2015.”

Peter Marsland, business development manager of Octopus Investments, agreed the array of vastly different investment products labelled P2P has resulted in a misconception about what this type of product is.”

Due diligence on P2P platforms - FTAdviser.com

4. US – FinTech

Raisin, an online marketplace for savings and investment products, has closed a Series D funding round raising $114 million, according to Crowdfundinsider. “This brings total funding for the Fintech to $200 million. Raisin said that existing investors Index Ventures, PayPal, Ribbit Capital and Thrive Capital all participated in the round.

Simultaneously, Raisin revealed that it has now topped $11 billion in deposits via its 62 partner banks generating $90 million in interest for savers.

Raisin said the additional funding would be utilized for “strategic acquisitions and further internationalization.”


 

5. US – FinTech

 

Crowdfundinsider reports:

 

“U.S. fintech and online provider of business valuation big data BizEquity has announced it has formed a partnership with Orion Advisor Services, LLC (Orion), a portfolio management solution provider for registered investment advisors, to increase the service and support that advisors may offer to small business owners, including the ability to determine the true value of their businesses.”