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Friday, 21 September 2012

UK Takes Joined-up Regulatory Approach To P2P Finance

The UK government has announced a cross-departmental working group to support the sustainable development of peer-to-peer finance (aka 'crowdfunding'), as part of its latest response to the Red Tape Challenge. 

The composition of this working group is testimony to the broad policy implications and opportunities posed by this new form of financial model for consumers and small businesses. The list of members includes the Office of Fair Trading, the Department of Business Innovation and Skills, HM Treasury, the Financial Services Authority and the Cabinet Office. However, it is known that the Department for Culture Media and Sport is also very interested in the potential for peer-to-peer finance to fund the development of the arts and entertainment industry.  

Specifically, that working group will "monitor the appropriateness of the current regulatory regime for peer-to-peer platforms" and take the lead in engaging with the peer-to-peer finance industry.  In the meantime, the government wishes to encourage continued self-regulatory efforts by the Peer-to-Peer Finance Association to address common operational risks, and to engage with policy-makers and regulators.

Other aspects of the government's response to the 'disruptive business models' Challenger Businesses Red Tape Challenge are discussed here.

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