PLATFORMS WORK TO PREVENT AUTOBOTS
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IT’S THE ECONOMY, STUPID
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Users are gaming the system
How will the sector fare in a downturn?
MarketInvoice’s Anil Stocker reveals his plans for growth >> 16
ISSUE 6 | MARCH 2017
The great IFISA conundrum
P2PFN investigation reveals several authorised firms are unaware of the product, while the biggest platforms are still awaiting approval A NUMBER of firms authorised to offer the Innovative Finance ISA (IFISA) are unaware of their status or even what it means, Peer-to-Peer Finance News has learnt. With most of the major peer-to-peer lenders still awaiting approval to offer the tax-free wrapper, a legal expert said that it “doesn’t make for a level playing field”, while one chief executive of a platform said it gave him concerns that there was a “tick-box approach” to authorisation. 30 companies are allowed to sell the tax-free wrapper around P2P investments to consumers, according to
HMRC’s latest list that was updated on 7 February. But several authorised firms contacted by P2PFN had not heard of the IFISA and had no idea that they were licenced to offer one. In fact, one company director appeared unaware of what an ISA was in general. It must be emphasised that the majority of IFISAauthorised firms are fully aware of the product and their regulatory responsibilities. A number of well-known P2P lenders have recently gained authorisation and this is in no way to suggest that they were found to be unaware of their obligations to the
regulator and to consumers. Companies wishing to offer the IFISA to consumers must first receive full authorisation from the Financial Conduct Authority (FCA), before applying to HMRC for
IFISA manager status. The FCA application process can be lengthy and the ‘big three’ P2P lenders are still awaiting authorisation after nearly 18 months. In contrast, HMRC approval is broadly seen as more >> 4
Allen: Most lenders want comfort of provision fund THE MAJORITY of lenders considering peer-to-peer would want the reassurance of a provision fund, according to P2P credit risk expert Kevin Allen.
The industry veteran, who was RateSetter’s firstever chief risk officer, said that less engaged investors would be better off choosing a platform with a
provision fund and lower returns. “I think the majority of lenders – the less engaged lender, like my mum and dad – don’t want to be
choosing their loans, they don’t want to be choosing their platforms,” said Allen, who is now chief risk officer of P2P payday lender The Money Platform. >> 5