The long awaited changes to P2P lending regulations in the UK are finally here. Today, the Financial Conduct Authority (FCA) announced that the new rules for peer to peer lending platforms have been set and will come into effect on December 9, 2019.

The biggest change here is around investor protections and it is also the most controversial piece. Investors will no longer be able to put more than 10% of their investable assets into peer to peer lending. Some people considered that number too low and somewhat arbitrary as many investors today have far more of their net worth in the peer to peer lending industry.

Another controversial part of the new rules is the introduction of an “appropriateness test” for investors. From December 9, 2019, P2P lending platforms will need to carry out an appropriateness assessment that considers a client’s knowledge and experience of P2P lending before the platform can accept a new investment. Not only that but platforms will be restricted to those people who are certified or self-certify as sophisticated investors, making it much more difficult for the industry to attract new investors.

Here are more highlights of the new regulations: [Read more…]