UK Crowdfunding Association's response to FCA policy statement
RESPONSE TO FCA ANNOUNCEMENT ON CROWDFUNDING REGULATIONS
We welcome today’s announcement, and the clarity it gives on how different forms of crowdfunding will be regulated from April this year.
We are pleased that rewards based crowdfunding and community raises remain outside of regulation.
Equity investments in early stage businesses are open to all, and the FCA have provided further clarity that the initial 10% cap can be lifted as crowdfunders become more experienced, regardless of the amount they invest. So we can keep the crowd in crowdfunding.
The lighter touch regime for loan based crowdfunding is also welcome, so that platforms that match lenders to businesses that can offer lower risk returns are accessible to ordinary investors. However we maintain our view that all debt based crowdfunding should be treated equally and will watch with interest the impact of these regulations on the market for bonds and debentures.
The FCA have maintained an open door policy throughout this consultation and we would hope that they continue to consult with the industry to ensure that regulation is proportionate and encourages innovation in the interests of the consumer, including the higher standards of disclosure offered by PLCs issuing bonds.
These regulations provide much needed clarity and certainty for businesses seeking to carry out crowdinvesting and we will push ahead with the work to open up ISAs to debt based crowdfunding and peer to peer lending.
Crowdfunding and peer to peer lending raised just short of £1bn in 2013*, and continues to grow rapidly as businesses discover a new way to access finance and lenders and investors tap into opportunities and returns not available on the high street.
Notes to Editors
The UKCFA is a trade association that represents more than thirty operating platforms across rewards, debt and equity crowdfunding. We aim to raise awareness of the opportunities alternative finance offers and remove barriers to this much needed innovation.
* The Rise of Future finance
UK alternative finance intermediaries facilitated £939m in funding to individuals and businesses in
2013. This was up 91% on 2012. This figure represents a broad range of distinct funding models such
as equity crowdfunding and invoice financing, all or which serve different customers and are
growing at different rates. Many of these are delivering finance to UK SMEs. In 2013 £332m of SME
financing was provided by alternative finance intermediaries.
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