The Financial Conduct Authority (FCA) and researchers from the University of Cambridge will join forces in a new research project to investigate crowdfunding and peer-to-peer lending.
Researchers from the Cambridge centre for alternative finance (CCAF), part of the Judge Business School, and the FCA will work with both investors and fundraisers who use non-traditional equity platforms.
The joint study will focus on topics such as how investors on the platforms assess risks, how the burden of due diligence is shared, what types of investments crowdfunding firms are competing for with investors’ money and how they compare in terms of risks and regulations.
Output from the project will inform the FCA’s ongoing post-implementation review of crowdfunding regulation, which it first introduced in March 2014.
“It is our great pleasure to partner with the FCA in this joint thought leadership programme and provide independent academic evidence to support its post-implementation review of crowdfunding regulations,” said Robert Wardrop, executive director of the CCAF.
“We look forward to collaborating with the FCA very closely in the coming months to systematically collect market data, gather crowdfunding user feedback and undertake policy-related analysis.”
The announcement comes as most UK P2P platforms, including big players Zopa, Funding Circle and RateSetter, await regulatory approval to offer investors Innovative Finance Isas.
The product was launched in the 2016 Budget, but City A.M. understands that leading platforms expect a wait of three to six months yet, as the FCA considers the best way to deal with this still-nascent sector.