News Briefing - Crowdfunding, SME And Alternative Finance

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1.UK – AltFi

Yahoo Finance uses the LCF as a news peg for problems in AltFi.

“A “perfect storm” means more and more Brits are at risk of losing their money or running into financial trouble with unsuitable investments, according to a top financial regulator.

Charles Randell, the chair of the Financial Conduct Authority (FCA), said on Tuesday that pensions de-regulation, low interest rates, and the rise of social media have left consumers vulnerable to fraudsters or high-risk investments that aren’t appropriate.

“A combination of the yield environment, the pension freedoms, and a whole load of other things means that people are now in a position where they can take a bunch of high risk investments,” Randell warned MPs on Tuesday.

London Capital Finance scandal

The comments came as he defended the FCA’s handling of the collapse of London Capital Finance.

London Capital Finance raised £236m selling high-risk mini-bonds it marketed as Fixed Rate ISAs online. The company collapsed in January, leaving thousands of investors out of pocket and some people’s life savings wiped out. Many London Capital Finance investors were “first-time investors — inheritance recipients, small business owners, or newly retired,” according to the BBC.

Earlier this year, the FCA and the Treasury announced an independent inquiry into London Capital Finance’s collapse. The Serious Fraud Office is also investigating and has made five arrests related to the case.

 

2. UK – AltFi

 

P2P Finance News reports on FCA moves to examine credit data.

“THE FINANCIAL Conduct Authority (FCA) has launched a market study on the credit information sector amid concerns over how it helps and hinders borrowers from getting loans.

The City watchdog said it will focus on the purpose, quality and accessibility of credit information, business models and competition as well as consumer engagement and understanding of credit reports and information.

The regulator said financial services firms use credit information when assessing credit risk and affordability and therefore it can impact how likely consumers are to be able to access a range of financial services, including mortgages, loans and credit cards and, in some cases, how much they pay for them.”

THE FINANCIAL Conduct Authority (FCA) has launched a market study on the credit information sector amid concerns over how it helps and hinders borrowers from getting loans. The City watchdog said it will focus on the... #ChristopherWoolard #creditinformationmarket #FinancialConductAuthority

3. UK – P2P

P2P Finance News reports.

“ABLRATE has heralded the City watchdog’s tighter rules on fair loan pricing but warned that investors should not see price as “a silver bullet for due diligence”.

The Financial Conduct Authority released its updated regulations on peer-to-peer lendingearlier this month, after a lengthy post-implementation review of the sector. It mandated platforms to demonstrate that they are pricing P2P loans fairly, reflecting the risk profile of the borrower.”


4. International - FinTech

The Korea Times reports:

 

“The government will push to revise relevant laws to offer greater leeway for fintech startups here in creating new business models, the Financial Services Commission (FSC) said Thursday.

Once realized, local players will be allowed to adopt business models and financial services developed by global unicorns. 

The FSC pointed to Kabbage, a U.S. fintech startup that offers loans to small businesses and retail consumers via its platform, as an example of a model that can be helpful for the local market.

"We will consider whether to allow the adoption of overseas models by local startups beginning in July," an FSC official said.

Currently, only banks and non-banking financial units such as mutual savings and credit card firms can offer direct loans to businesses and consumers.”


5. International – FinTech

 

The UN Economic and Social Commission for Asia and the Pacific issues a release:

“A crowdfunding platform for women farmers, online marketplaces for women-produced goods and services, and e-wallet enabled lending were among ten of the winning business models which will be co-funded by the United Nations to improve access to finance for women-owned, managed or led micro, small and medium enterprises (MSMEs) in the region.

Launched by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the United Nations Capital Development Fund (UNCDF) in March 2019, the Women Fintech MSME Innovation Fund will support the implementation of the winning private sector FinTech and digital business solutions for women entrepreneurs in Bangladesh, Cambodia, Fiji, Myanmar, Nepal, Samoa and Viet Nam.”

 

6. International – FinTech

The European Council has concluded its negotiations on the European Crowdfunding Service Provider Regime, after discussing for more than a year how to facilitate more cross-border Crowdfunding, especially for equity-based and lending-based Crowdfunding, according to Crowdfundinsider.

“The European Council “defines the EU’s overall political direction and priorities.”

The Council is not one of the EU’s legislating institutions, as an entity it sets the EU’s policy agenda, by adopting conclusions during Council meetings which identify issues of concern and actions to take.

Departing from the proposal of both the European Parliament and the European Commission (EC), the Council agreed to create a Harmonized Regime across Europe instead of an Opt-In Regime.

Platforms which intermediate the emission of transferable securities or loans fall under the scope of the new regime and have to obtain a license from the national supervisor agency to operate cross-border.”