If you are a small FCA authorised and regulated financial services firm and you are running your business as well as the compliance function, you are no doubt regularly bogged down with work which you would consider an administrative burden.
We work with firms like yours.
Last week the FCA issued a consultation paper (‘CP’) on Loan-based (‘peer-to-peer’) and investment-based crowdfunding platforms, proposing changes to the existing applicable regulatory framework.
What are mini-bonds?
A 'bond' is a debt instrument under which an investor lends money to a borrower, usually a corporate entity. Bonds are issued by the borrower on specified terms which are contained in a 'bond instrument'.
Using the internet to promote an investment is an effective way to access a large audience. Those using this medium must, however, ensure that they are not in breach of the rules imposed by the Financial Conduct Authority (FCA).
The FCA has the power under section 137S of the Financial Services and Markets Act 2000 that enables them to ban misleading financial promotions. This power means the FCA can remove promotions immediately from the market, or prevent them from being used in the first place, without going through their enforcement process.
The Conduct of Business Sourcebook (COBS) 4.2 specifies that:
A firm must ensure that a communication or a financial promotion is fair, clear and not misleading.
In June 2013 the Financial Conduct Authority (FCA) published a policy statement and final rules to ban the promotion of units in unregulated collective investment schemes (UCIS) and other non-mainstream pooled investments (NMPIs) to the vast majority of retail investors in the UK from 1st January 2014.