FCA is consulting on proposed changes to client money rules for firms that operate loan-based crowdfunding platforms for regulated peer-to-peer (P2P) and unregulated business-to-business (B2B) or other unregulated lending. Sometimes firms will spread the risk of a borrower’s default amongst several lenders, creating a bundle of loans, which may be a mixture of P2P and B2B agreements. Under current FCA rules, money held in relation to P2P agreements should be held in compliance with chapter 7 of the Client Assets Sourcebook (CASS 7).  This means these monies must be segregated from both the relevant firm’s own monies and those that relate to unregulated B2B agreements. In response to industry desire to offer CASS protection to all lenders, FCA’s proposals would allow firms that hold money in relation to both P2P and B2B agreements to elect to hold both kinds under CASS 7 if they wish to do so. Firms may then segregate P2P and B2B monies together, but separately from the firms’ money, without breaching CASS 7. But, if firms choose to do this, they would not be able to use the professional client opt out to take lender monies relating to B2B agreements outside CASS. Firms will be able to elect whether to implement this option and also whether to hold “whole” B2B loans within CASS but separately from their P2P business. Consultation closes on 11 February. (Source: FCA Consults on Crowdfunding and Client Money)