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New FCA rules for P2P lenders

New Financial Conduct Authority (FCA) rules that come into force on 9 December 2019 mean you will have to tell us what type of investor you are and show that you understand the risks involved before we can accept your instruction to lend money to businesses.

This investor classification and appropriateness assessment is required by all peer-to-peer (P2P) lending platforms that are regulated by the FCA. You will only have to complete the LendingCrowd appropriateness assessment once. 

How do I complete the classification and assessment?
Log in to your LendingCrowd account as normal and you will be guided through the process. We’d encourage you to do this as soon as possible and before 9 December.

How long will this take me to complete?
The investor classification and appropriateness assessment will only take a few minutes and we provide helpful information along the way.

Why are you doing this?
All P2P platforms that are regulated by the FCA will have to establish that people understand the risks involved and have the appropriate level of knowledge and information on this type of lending. If you have registered with other P2P lending platforms, you should expect to see them introducing similar processes.

The new rules take effect on 9 December – why are you doing this now?
We want to give you time to complete this process before the new rules come into force, and make sure that you’re fully aware of the P2P lending process. We’re fully supportive of the FCA’s aims of ensuring that the industry takes a responsible position on this important issue.

What happens if I do nothing?
You won’t be able to lend any further money to businesses through the LendingCrowd platform from 9 December, when the new rules take effect. We’d appreciate all our lenders going through this short process in good time.

If you have a Self Select Account/ISA with Autobid enabled, your automatic bids on loans will stop, in compliance with the regulations. Repayments will be held as cash in your account, earning no interest, until you have completed the classification and appropriateness assessment. Then you may continue as normal.

If you have a Growth Account/ISA or Income Account/ISA, your repayments will continue to be lent out automatically. However, you won’t be able to add more funds to your account until you have successfully completed this quick process.

What happens if I don’t pass the appropriateness assessment?
You can try again. There are only 11 questions and you have two attempts to get each one correct. We provide helpful information along the way to fully explain the process of P2P lending.

Will I have to repeat this process?
You only have to complete the LendingCrowd appropriateness assessment once. You can renew or update your investor classification as often as you like, but it must be done at least every 12 months. Don’t worry, we’ll notify you when you have to do so.

What other changes are you making?
We recently added new information fields to our loan details pages and will be implementing more changes to our platform in preparation for the new FCA rules. Check our blog for updates. 

How can I find out more?
Log in to your LendingCrowd account and we’ll guide you through the investor classification and appropriateness assessment.

If you have any questions or need any help, please email or call 0345 564 1600.

Article author

Gareth Mackie

Gareth Mackie

If you invest through LendingCrowd you should understand that your capital is at risk.

LendingCrowd is the trading name of Edinburgh Alternative Finance Limited, Company Number SC468392, authorised and regulated by the Financial Conduct Authority (Firm reference number 670991). LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.

Read more about the risk involved when investing and borrowing.

The company's registered office is 23 Manor Place, Edinburgh, EH3 7DX.

Copyright © LendingCrowd 2020. All rights reserved.

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