Draft UK Legislation Confirms Regulatory Position of Borrowers on Peer-to-Peer Lending Platforms
12/21/2017HM Treasury has published draft legislation to amend the Financial Services and Markets Act 2000 (Carrying on Regulated Activities By Way of Business) Order 2001 (S.I. 2001/1177), to clarify the position of borrowers who raise funds through peer-to-peer lending platforms.
The draft Order will, once it is approved by Parliament, clarify that only firms whose core business involves borrowing through a peer-to-peer platform would need to obtain a banking license and be regulated as a "deposit taker". The draft legislation has been laid before Parliament to address uncertainty for businesses borrowing via peer-to-peer platforms (and for the platforms themselves) as there is a risk that those borrowers might in certain circumstances be carrying on the regulated activity of accepting deposits.
The draft legislation must be approved by both Houses of Parliament and will come into force on the day after the day on which it is made.
View the draft Order.
View the explanatory memorandum to the draft Order.TOPIC: FinTech