FCA has written a Dear CEO letter to firms that operate loan-based crowdfunding platforms that facilitate loans to lending businesses. It highlights that if a lending business borrows through a platform and then lends money to others, it may be accepting deposits for the purposes of the RAO, and thereby committing a criminal offence if it is not authorised under FSMA. FCA would consider any platform that facilitated acceptance of deposits by borrowers who were not properly authorised to be acting in a manner “not consistent” with FCA’s expectations and potentially in breach of certain of its Principles and Threshold Conditions.
FCA expects firms to establish whether they may have been dealing with such businesses and, if they have, to take appropriate steps including:
- stopping facilitating their acceptance of deposits;
- considering what to do in future to ensure the platform does not facilitate unauthorised borrowers in their acceptance of deposits; and
- assessing what to do if a borrower without the right permissions has already been accepting deposits via the platform.
FCA requires a response from all firms it has contacted, including nil returns, by 14 March.