The light-touch regulatory framework applied to crowdfunding
companies since 2014 could come to an end if the Financial
Conduct Authority (FCA) follows through with a
recently-proposed change of rules.
The regulator said in December it had found '
evidence of potential investor detriment’
following a July 2016 call for input on areas of specific
concern for the crowdfunding market as it pertains to
loan-based and investment-based crowdfunding.
As investors turn to alternative investment platforms to
boost savings levels, the global crowdfunding market is
expected to have reached $50 billion in 2016, surpassing
venture capital funding levels for the second year running. In
the UK, research from Cambridge university and Nesta showed
that the online alternative finance industry grew to £3.2
billion ($3.9 billion) in 2015, nearly double the levels seen
the previous year.
"It’s a relatively new financial sector so the
FCA wants to be ahead of the game...