News Briefing - Crowdfunding, SME And Alternative Finance

crowd in a street

1.UK- P2P

Lend Academy looks at the new FCA guidelines for consumer sign-up terms.

“The long awaited changes to P2P lending regulations in the UK are finally here. Today, the Financial Conduct Authority (FCA) announced that the new rules for peer to peer lending platforms have been set and will come into effect on December 9, 2019.

The biggest change here is around investor protections and it is also the most controversial piece. Investors will no longer be able to put more than 10% of their investable assets into peer to peer lending. Some people considered that number too low and somewhat arbitrary as many investors today have far more of their net worth in the peer to peer lending industry.

Another controversial part of the new rules is the introduction of an “appropriateness test” for investors. From December 9, 2019, P2P lending platforms will need to carry out an appropriateness assessment that considers a client’s knowledge and experience of P2P lending before the platform can accept a new investment. Not only that but platforms will be restricted to those people who are certified or self-certify as sophisticated investors, making it much more difficult for the industry to attract new investors.

Here are more highlights of the new regulations:

Introducing more explicit requirements to clarify what governance arrangements, systems and controls platforms need to have in place to support the outcomes they advertise. These new rules focus particularly on credit risk assessment, risk management and fair valuation practices, especially for platforms with more complex business models.

Strengthening rules on plans for the wind-down of P2P platforms.

Applying marketing restrictions to P2P platforms, designed to protect new or less experienced investors. We have also clarified the practical implication of these new rules as they apply to P2P agreements.

Introducing a requirement that an appropriateness assessment (to assess an investor’s knowledge and experience of P2P investments) be undertaken, where no advice has been given to the investor. We have also provided guidance on what the assessment should include.


Setting out the minimum information that P2P platforms need to provide to investors

 

2. UK – EIS / AltFi

The Business Desk reports:


“Manchester based Praetura Ventures has closed its Enterprise Investment Scheme (EIS) fund at £15m. It will use the money to help address the £300m venture funding gap in the North West. The £15m investment vehicle will back 8-10 tech-enabled early-stage businesses predominantly in the region, who will use the capital to hire key staff, invest in new technologies and, ultimately, scale. The £15m amount was raised in just three months from investors across the UK.”



3. UK – AltFi


Citywire reports.

“A Kent-based advice firm with a number of Financial Ombudsman Service complaints upheld against it, some relating to Harlequin Property and Sustainable AgroEnergy investments, has been dissolved.

As a result, complaints have been handed from the FOS to the Financial Services Compensation Scheme (FSCS). The former managing director of Choices - Your Mortgage Solutions, Antony Frost remains authorised by the FCA via network In Partnership.

In February, three FOS complaints were upheld against Bromley-based Choices - Your Mortgage Solutions over investments in Harlequin Property and Sustainable AgroEnergy Investment Programme.

In the same month, it had a compulsory strike-off notice on Companies House and was dissolved on 10 May.

Choices - Your Mortgage Solutions was founded in 2003, and was taken off the Financial Conduct Authority’s (FCA) list of authorised advice firms in January 2015.”

4. UK – AltFi

P2P Finance News runs a sponsored piece on Wellesley’s excursion into stocks and shares ISAs.

“WELLESLEY HAS BEEN teasing a major new investment product for the past few months, but it is finally time for the big reveal. The platform’s first ever stocks and shares ISA will be released to new and existing customers in the very near future, and it truly offers something different.

Unlike many other stocks and shares ISAs, the Wellesley offering will hold just one type of product – Wellesley listed bonds. This means that the ISA will effectively allow Wellesley investors to benefit from competitive rates from bond products, but via a tax-free wrapper. “

An interesting new ISA concept | Peer2Peer Finance News

5. International - FinTech

“Fintech startup Paysend has added six new countries to the list of jurisdictions where its network is available. Paysend is now available in more than 70 different countries.

The news comes alongside a Series B crowdfunding round hosted on the Seedrs platform. Paysend is seeking £4.2 million, for a 3.3% equity stake, at a pre-money valuation of £125 million dollars. The just-launched offering has almost hit its initial target backed by 73 individual investors.

The Series B round has been led by Plug and Play and Digital Space Ventures. Paysend closed on a £20 million Series A round in 2018.

Paysend is a payment platform that enables users to transfer money to and from countries instantly.

Paysend operates with a global network of payment systems, banks, and local card schemes and is a Principal member of Mastercard, VISA and China Union Pay.

During 2019, Paysend has scaled its network in India, Nepal, Philippines, Bangladesh, Sri Lanka, and South Africa.”

 

6. International – FinTech

Coin Telegraph on another move towards digital stable coins and digital payment systems.

“The head of Russian oil company Rosneft has not ruled out the possibility of paying for oil using cryptocurrencies in the future, according to a report by Snob.ru on June 6.

Igor Sechin said the industry’s acceptance and awareness of digital assets is beginning to rise as Silicon Valley tech giants including GoogleAmazon and Apple begin to explore the oil and gas sector.

While he suggested that the stablecoin Facebook is currently developing could one day be used to purchase oil by the barrel, Sechin warned there are some hurdles that cryptocurrencies need to overcome if they are to pique the interest of energy giants. He was quoted as saying:

“Greater flexibility often means greater volatility, and digitalization creates risks for maintaining commercial secrets and leads to the need to create new regulatory mechanisms, additional reservations. Today, technology companies do not have quality answers to these fundamental questions.”

Sechin was speaking at the St. Petersburg International Economic Forum.”