February 6, 2015
The U.K. Treasury Department has published the draft Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2016 for approval by both Houses of Parliament. Various changes to the regulatory framework is underway for the the alternative financing industry such as Peer-to-Peer Lending.
The scope of the regulated activities peer-to-peer lending platforms and providing advice on lending through such platforms will be extended. The regulated activity of operating an electronic system in relation to lending will be carried on regardless of whether the person operating the system (or a person acting on instructions) collects only the interest or capital due under the agreement or both. It will also be a regulated activity to facilitate another person transferring their rights under a relevant agreement to a third person. Also, the regulated activity of advising will include: (a) giving advice to a lender or potential lender on the merits of entering into, or assuming rights under, a relevant agreement through an electronic system; (b) providing instructions to the operator of such a system; (c) enforcing or exercising such a lender’s rights; and (d) assigning rights under such an agreement; and amending the Small and Medium Sized Business (Finance Platforms) Regulations 2015 so that the obligation of a designated bank to refer an unsuccessful finance application by a small or medium sized business to a designated finance platform does not apply where the application was made on behalf of the business by a broker.