FCA chastises firms on risk warnings
The City watchdog has cracked down on platforms that were not complying with the new risk warning rules, Peer2Peer Finance News understands.
The Financial Conduct Authority (FCA) wrote to trade bodies on 22 December, saying they had been reviewing compliance with the new risk warning rules which came into effect on 1 December and that so far compliance rates had been poor.
The regulator then contacted firms directly where they thought their risk warnings did not meet standards, requesting immediate action.
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Peer2Peer Finance News knows of one platform which received an email from the FCA on 11 January, requesting a couple of changes which the platform made promptly.
The FCA declined to comment.
The new risk warnings are part of the FCA’s stricter rules on the marketing of high-risk investments. The regulator created a bespoke risk warning for P2P following industry feedback, updating the wording to say that investors could lose money, rather than lose all of their money.
The FCA said it will look at whether any further differentiation of the risk warning is needed in its second phase of work planned for next year.
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