Elfin Market is a London-based peer to peer lending platform and they have launched a new physical credit card in...
In their recently completed review, the Financial Conduct Authority (FCA) was particularly worried about some platforms using customer money to buy loans from rival platforms; FCA CEO Andrew Bailey explained that platforms don't have enough loans to present so in turn they use investor money to buy up loans from a rival platform; this is worrisome as investors are not being told the correct risks; Mr. Bailey did not disclose any platforms by name and said the issue was not widespread but worth keeping an eye on. Source
AltFi highlights four main factors influencing alternative finance in 2017; UK regulatory developments continue to influence the market with new authorizations from the Financial Conduct Authority and ongoing consultation on the crowdfunding market; the small business lending referral scheme began in November with high expectations for increasing alternative lending originations; the launch of Marcus by Goldman Sachs is expected to affect competition and potentially set a precedent for online lending platforms lending from deposit capital; the Article 50 clause, which begins the process for the UK leaving the European Union, is still open for debate with the final action occurring in March; the March results will significantly influence the economic environment in 2017. Source
The long awaited new rules for P2P lending in the UK are now here; the Financial Conduct Authority (FCA) announced...
The UK’s Financial Conduct Authority has told asset managers that they need to focus more on customer interests and stop the bad behavior; the rules come after a more than 2 year investigation into the sector; Christopher Woolard, executive director of strategy and competition at the FCA, tells the FT, “Today’s announcements are an important part of a package of measures that, combined, aim to achieve a fair, transparent, open and accountable market.”; some of the new rules include hiring independent directors, profits from moving money from one fund to another will be mostly banned and they will need to switch investors to the cheapest version of their funds. Source.
The UK's Financial Conduct Authority (FCA) released a discussion paper on blockchain that looked to better understand the new technology and how it can be used in financial services; key takeaways from the paper include the ability to cut costs and remove certain back office operations to streamline processes and increase the speed of reconciliation; while there are many potential benefits, the FCA still wants to ensure the risks don't outweigh the benefits; the FCA is also looking at how they might regulate blockchain, they typically regulate the application of technology but to ensure what they are calling "sensible development" they might consider regulating the actual ledger technology. Source
Investors in the UK are anxious for new innovative finance individual savings account (IFISA) options with P2P lenders as the new tax year begins; the IFISAs were launched for P2P investing nine months ago however limited options still remain due to the authorizations given by the Financial Conduct Authority (FCA); it is expected that the largest providers, Zopa, Funding Circle, Ratesetter and LendInvest, will receive authorization however it has not been granted yet from the FCA; platforms currently offering IFISAs include Abundance, CrowdStacker and Crowd2Fund; Folk2Folk is currently the largest lender authorized with plans for also launching an IFISA. Source
The Financial Conduct Authority's Director of Strategy and Competition Christopher Woolard has reported some concerns over fintech regulations globally; in a speech at the Innovate Finance Global Summit in London, Woolard specifically discusses fintech sandboxes noting concerns about establishing them before any government regulatory standards are in place and suggesting that countries institute some guidance before introducing sandbox initiatives; the UK has been a leader in sandbox innovation and the country plans to publish a full report in May on its first sandbox initiative. Source
Innovate Finance and the Financial Conduct Authority have published a preview report on the UK Fintech Sandbox with a full report planned for May 2017; the preview report provides insight on the benefits of fintech sandboxes and how they can promote innovation while also helping to facilitate regulation. Source
Stress testing from Funding Circle has reported its loan platform would still provide investors with a net return of 6.4% given a worst case market scenario; while effects from Brexit continue to be debated, market skeptics are not as optimistic as the UK platforms; they foresee stagflation in the UK characterized by higher unemployment and slowing GDP growth; they are also concerned about a lack of skin in the game which has prompted parliament member, Chris Philp, to request from the Financial Conduct Authority that a portion of each firm's loans include balance sheet capital; while marketplace lending executives are against this approach, policy makers are considering it. Source