Rely on the most comprehensive, up-to-date legal content designed and curated by lawyers for lawyers
Work faster and smarter to improve your drafting productivity without increasing risk
Accelerate the creation and use of high quality and trusted legal documents and forms
Streamline how you manage your legal business with proven tools and processes
Manage risk and compliance in your organisation to reduce your risk profile
Stay up to date and informed with insights from our trusted experts, news and information sources
Access the best content in the industry, effortlessly — confident that your news is trustworthy and up to date.
With over 30 practice areas, we have all bases covered. Find out how we can help
Our trusted tax intelligence solutions, highly-regarded exam training and education materials help guide and tutor Tax professionals
Regulatory, business information and analytics solutions that help professionals make better decisions
A leading provider of software platforms for professional services firms
In-depth analysis, commentary and practical information to help you protect your business
LexisNexis Blogs shed light on topics affecting the legal profession and the issues you're facing
Legal professionals trust us to help navigate change. Find out how we help ensure they exceed expectations
Lex Chat is a LexisNexis current affairs podcast sharing insights on topics for the legal profession
Discuss the latest legal developments, ask questions, and share best practice with other LexisPSL subscribers
Financial Services analysis: how does the Financial Conduct Authority (FCA) plan to regulate increasingly popular crowdfunding platforms? Bill McCaffrey, partner and head of consumer finance at CMS Cameron McKenna, discusses the FCA's attempts to catch-up with this new funding model.
Press Release: Financial Conduct Authority outlines how it will regulate crowdfunding
A proposal on new rules providing clearer information to consumers who want to invest in businesses via crowdfunding has been published by the FCA. Crowdfunding is a solution for individuals, organisations and businesses to raise money. It involves a number of people pooling money through a website, often called a platform. Peer-to-peer lending and equity investment based crowdfunding are the two investment forms requiring regulatory oversight. The FCA is issuing this consultation paper as it is taking over the regulation of the consumer credit market from the Office of Fair Trading (OFT) in April 2014.
What are the key features to consider when discussing crowdfunding?
There are two distinct forms of crowdfunding platforms:
For ease of reference we shall refer to the entity in search of funding under both structures as the 'borrower'.
The former is known as 'investment-based crowdfunding' and firms operating the platforms are likely to require the FCA permission of 'arranging deals in investments'--they are therefore already within the scope of regulation. However, the FCA recognises that the rulebook was not designed for such activities and therefore certain revisions will be required.
The latter is 'loan-based crowdfunding'. Operating such platforms does not currently require any FCA permissions, and while the OFT does operate a licensing regime for debt administration activities, a number of the Consumer Credit Act 1974 (CCA 1974) provisions do not apply to such agreements and investor protections.
The FCA has therefore sought to increase its regulation of
Access this article and thousands of others like it free by subscribing to our blog.
Read full article
Already a subscriber? Login
0330 161 1234