September 20

Fca Advising On P2P Agreements

It is likely that ig companies would like to withdraw this authorization. All companies that do not intend to consult P2P agreements can request an amendment to the authorizations in order to have the authorization withdrawn using this short form and send it to P2Padvice@fca.org.uk The ACF has decided not to apply the suitability test to P2P agreements when they are sold on a non-recommended basis; or to require companies to consider P2P agreements when they declare themselves independent; But each of these things is checked and could change in the future. The ACF said that companies that claim to be independent should not be required to consider P2P agreements when recommending investment products for retail investors to a retail investor, which supported the majority of responses to the consultation. The FCA`s March 2016 policy statement (PS16/8) on the separation of customer money on credit-based crowdfunding platforms, IFISA and the regulated activity of advising on P2P agreements also extended this requirement to personal recommendations regarding P2P agreements of 6 April 2016. During the consultation, the FCA was also asked whether P2P agreements were considered complex and whether an adequacy review should therefore be conducted when a sale is not recommended. On 6 April 1016, undertakings authorised to carry out a regulated activity of `investment advice` were automatically added to their quotas an additional activity, which was available in the financial services register. This new automatic authorization was intended for “peer-to-peer consultation (P2P) agreements”. Some companies had argued that they would not be able to carry out appropriate due diligence for P2P agreements, which would make it more difficult or impossible for them to comply with the adequacy rules. They also argued that there would be little point in consulting P2P agreements, as it would be difficult to measure the associated risks, so most investments would be “not advised”. Unsurprisingly, the ACF rejected these arguments: “.

We believe it is important for companies to think about the research and due diligence they need to do to ensure they are familiar with the nature and risks of the products they choose for customers. We would expect a consultant to understand the differences in risk between different types of products, especially those that may seem similar. . . .

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