1.UK – P2P
P2P Finance News looks at expected changes to P2P regulation:
“PEER-TO-PEER lending platforms are gearing up for the introduction of appropriateness tests, in anticipation of the outcome of the Financial Conduct Authority’s (FCA) review into the sector.
The City watchdog is expected to release final rules on reform of the P2P sector this summer, following controversial proposals released last year which mooted the introduction of categorisation and appropriateness tests for P2P investors.
The industry on the whole has supported the introduction of appropriateness tests but expressed concerns about the way they would be implemented and resulting costs. Firms are now working together on solutions.
The Tax Incentivised Savings Association (Tisa) has established a working group to create a standard approach for appropriateness tests, which it will present to the FCA.
The investments trade body created a similar framework in response to the revised Markets in Financial Instruments Directive (MiFID II) – EU regulations that mandated a greater breadth of investment firms to implement appropriateness tests, although this did not include P2P platforms.
“The guide will help firms and their customers determine whether and to what extent P2P is appropriate for non-advised customers,” Jeffrey Mushens, technical policy director at Tisa, said.
“This would provide an alternative to the approach of restricting investment in P2P to investors who can demonstrate that no more than 10 per cent of their investable assets could be invested in P2P.
“The working group is made up of representative industry members and we are aiming to publish a draft guide in June.”
There are 15 P2P platforms in the group including ‘big three’ lender RateSetter.
Mario Lupori, chief investments officer at RateSetter – who chairs the group – said an appropriateness test can be “very effective in ensuring that investors understand the nature of P2P investments, while not restricting access.”
2. UK – P2P
AltFi commentary cites events at Lendy and GLI as harbingers of a potential “credit crunch” in the P2P sector.
3. UK - FinTech
The Raconteur, a Times fold-in, looks at how FinTech is taking on mainstream banking.
The traditional banking model that has served financial institutions for centuries is under fierce threat. But while any one company’s greatest rival used to be found within its own industry, that’s no longer necessarily the case.
4. UK – FinTech
5. US – FinTech
Crowdfund Insider showcase a comment from a leading securities lawyer on crypto regulation.
“On the whole, the SEC’s approach to securities regulation is principles-based – an investment contract is a security whatever form it may take or technology used in its offering – which is why the SEC shouldn’t need rules or regulation specific to crypto-assets,” Moustakis added. “But one of the challenges here is that crypto-assets are plastic in nature. The offer and sale of a crypto-asset could constitute a securities transaction; however, over time, the facts and circumstances may change such that the same asset is no longer a security. And, at that point, it falls outside of the SEC’s jurisdiction. The SEC can reach only crypto-securities, so to speak, or security token offerings, not all crypto-assets.”