Rebuildingsociety to offer promotions advice to cryptoasset firms
Rebuildingsociety has announced a new service for the approval of financial promotions for cryptoasset firms.
The peer-to-peer business lender, which has operated as a principal for a number of approved representatives (ARs) in the P2P space, said that the new service builds on its experience in reviewing and approving third-party financial promotions.
New crypto asset marketing regulations were introduced in June, which are very similar to the marketing restrictions imposed on P2P lenders. From 8 October 2023, businesses marketing crypto assets to UK consumers will need to introduce a cooling-off period for first time investors. The regulator has also banned ‘refer a friend’ bonuses and all crypto firms are now required to put in place clear risk warnings on their websites, and to ensure that adverts are clear, fair and not misleading.
“We are also familiar with the ‘high-risk investments’ (restricted mass-market investments) regime, and our technical team (via sister company White Label Crowdfunding) is familiar with various forms of cryptoassets and their underlying technologies,” Rebuildingsociety said. “So the combination of these three factors positions us well to provide this service.
“The new rules are restrictive and serve to best protect consumers under the interim framework, but we are confident that we can help cryptoasset firms to market their products and services effectively and appropriately, in a compliant manner. We have input into GC23/1 [regulatory guidance on cryptoasset financial promotions] and, together with our advisers (and with assistance from the trade association the UK Crowdfunding Association), will work to shape future regulation.”
To get started with the application process, Rebuildingsociety will review the firm, officers, crypto assets, business model and preparedness as part of the due diligence assessment.
Following a successful decision in principle, and signed agreement, the platform will work with clients to ensure they are appropriately set up and prepared to onboard clients in a compliant manner.
This set-up will include implementing the appropriateness test, personalised risk warnings and the direct offer cooling off period. It will also review all existing financial promotions, including the website, and training for the team on the financial promotions regime.
Read more: Rebuildingsociety says consumer duty is pivotal for P2P lending
“Once onboarded, we’ll review and approve your financial promotions in a timely manner,” Rebuildingsociety said. “Where appropriate, we can also assist you with matters in connection with dealing with the regulator.”
Rebuildingsociety operates a P2P business lending platform, as well as acting as a principal for ARs. However, the AR regime has been under increased scrutiny of late. Last year, the Financial Conduct Authority (FCA) confirmed new rules to make principals more responsible for their ARs.
Read more: FCA puts restrictions on 10 principals as part of AR crackdown
The regulator also expressed concern over the AR/principal structure for P2P lending platforms, preventing Rebuildingsociety’s ARs from doing any new lending from February 2021 until September 2022.
The FCA said it hopes the new rules will help prevent consumers being mis-sold or misled by ARs and will prevent misconduct by ARs undermining markets operating fairly and safely.
