Regulatory focus sharpens for UK crowdfunding

Author: Amélie Labbé | Published: 11 Jan 2017

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...