On January 21, 2016, the FCA issued a consultation paper on loan-based crowdfunding platforms and the segregation of client money. Current FCA client money rules (CASS 7) require that investor monies held by a firm under a Peer to Peer agreement (i.e. money that is to be lent or received in repayments) is segregated from the firm’s own money. Money relating to unregulated Business-to-Business lending (i.e. B2B agreements) must also be segregated from investor monies held by a firm (but not from the firm’s own money). The FCA’s proposals would allow firms to hold client monies in relation to both P2P and B2B agreements together. This change would be less burdensome to firms, as some do not have systems in place that can distinguish between monies held for P2P and B2B agreement purposes. Firms would then be able to segregate P2P and B2B monies from the firm’s money, but keep them together, without breaking the FCA rules. Responses to the consultation are due by February 11, 2016.
The consultation paper is available at: http://www.fca.org.uk/static/documents/cp16-04.pdf.