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FCA to crack down on crowdfunding

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Andrew Bailey, the FCA chief executive, said: the FCA would take soundings next year on new rules to address the problems it had found. It proposed higher standards of disclosure by all crowdfunders and stricter rules on wind-down plans for peer-to-peer lenders. The FCA said it was difficult for investors to understand the risks and returns of crowdfunding, marketing material was sometimes unclear and misleading, and some firms did not manage risks and conflicts of interest properly. Peer-to-peer lenders’ use of provision funds to cover loan defaults may give investors the incorrect belief their money is protected and some firms do not have solid plans in place if they fail, the FCA said. The FCA has warned before that investment-based crowdfunding is hazardous and has warned consumers they are likely to lose all their money because of the failure rate for new businesses.  Guardian

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Excellent news as this presumably means that they have now eliminated corruption and malfeasance in the financial sector and have the spare capacity to go after the little guy.

 

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