The FCA refreshes P2P sector regulation

The FCA has published the outcome of its review of the regulation of peer-to-peer lending via a Policy Statement on its website this morning. This follows a consultation on proposals over the last nine months in which RateSetter engaged actively, leading work across our industry. You can read our blog from the time the FCA’s proposals were released here.


The FCA’s Statement validates our mission to open the asset class of loans to everyone, from the high net worth individual to the normal saver looking to earn more on their money. Indeed, in framing its Policy Statement, the FCA has re-emphasised that the P2P sector offers valuable choices for investors and that it wants to enable future innovation in products and services.


Overall, the updated rules will raise standards across the P2P sector and drive out bad actors with steps forward in specific areas such as risk management and governance. As a result, people can now invest with confidence that P2P lending is particularly well regulated and here to stay.


The FCA has decided to introduce an investment limit for people that are new to investing in the P2P sector (although this does not affect existing investors and the limit falls away once the person gets used to P2P). We have always believed that this is an unnecessary and patronising additional step for new investors – particularly in the context of other measures that we do support, such as an appropriateness test to ensure investors understand the risk and reward of P2P – but we take comfort in the FCA’s statement that the limit “is not designed to prohibit access…rather, it aims to limit the amount new retail investors can initially invest, until such time as they gain more experience.” As we have said, this does not apply to existing investors.


That one point aside, this is a significant and positive day for the P2P industry. The FCA has put it beyond doubt that we are regulated on a par with mainstream savings and investment choices, making it an ever more logical component of everyone’s investment portfolios.


We are more confident than ever that RateSetter’s market-leading stability and liquidity and our unique track record of risk management position us well to continue to grow and continue to deliver value to people looking to earn more on their money.