The Financial Conduct Authority (FCA) will introduce rules designed to prevent harm to investors in peer-to-peer platforms, the regulator has confirmed.
Among the changes it is introducing are measures to place a limit on investments in peer-to-peer agreements for retail customers new to the sector of 10 percent of investable assets.
The FCA said the limit is an important means of ensuring that investors do not overexpose themselves to risk. The investment restriction will not apply to new retail customers who have received regulated financial advice.
It comes less than a week after peer-to-peer lender Lendy entered administration.
In addition to the FCA’s restrictions, the new rules cover:
Christopher Woolard, executive director of strategy and competition at the FCA, said: “These changes are about enhancing protection for investors while allowing them to take up innovative investment opportunities. For peer-to-peer to continue to evolve sustainably, it is vital that investors receive the right level of protection.”