The Financial Conduct Authority (FCA) found that almost two thirds of peer-to-peer lending and crowdfunding firms had failed to comply with its new risk warning in the month that the rules came into force.
It said in its annual report that it reviewed 67 firms a fortnight later to assess if they were complying and found that 60 per cent had failed to comply with the new standards.
“We were extremely concerned with this lack of compliance,” the FCA said. “So we took immediate action to ensure the firms remedied this.”
P2P platforms now have to display the following risk warning on their website:
“Don’t invest unless you’re prepared to lose money. This is a high‑risk investment. You may not be able to access your money easily and are unlikely to be protected if something goes wrong. Take 2 mins to learn more.”
Peer2Peer Finance News reported earlier this year that the FCA had written to trade bodies due to its concerns that compliance with the new risk warning rules had been poor.
The City regulator is introducing a new regulatory authorisations gateway later this year, restricting firms from approving financial promotions, unless they have the FCA’s permission to do so.
It revealed in its annual report that 8,582 financial promotions were withdrawn or amended last year, 14 times more than the year before.