FCA has published a discussion paper on the updates it plans to make to its rules and guidance on disclosure and advice relating to loan-based crowdfunding investments (peer to peer (P2P) agreements) in response to the introduction of the Innovative Finance ISA (IFISA) in April 2016. The Government has announced it intends to make advising on P2P agreements a regulated activity. FCA asks whether firms should give prospective investors in IFISA information on:

  • the tax consequences if the P2P agreement is not repaid;
  • the tax consequences if an investor wants to withdraw a P2P agreement from an IFISA; and
  • switching ISA managers.
  • It also seeks views on:
  • whether its suitability rules and its rules banning receipt and payment of commission should apply to firms that give advice on P2P agreements, once this becomes a regulated activity; and
  • when appropriate, risks customers take if they invest via a firm with interim permission.

It does not, however, think it will be appropriate to make advice on P2P agreements subject in principle to its Retail Distribution Review (RDR) rules. FCA seeks views by 31 December and will consult on rule changes once the final form of legislation is in place. (Source: FCA Consults on IFISA Changes)