FCA confirms P2P commission ban in IFISA rulebook

Following a discussion paper in November, the FCA has confirmed that it will apply rules that ban the payment or receipt of commission by firms in relation to personal recommendations involving advice on P2P agreements.

It has also added guidance on existing disclosure rules to clarify what information firms should disclose in relation to IFISAs.

The regulator has confirmed that consumers who receive advice on P2P agreements will have access to the ombudsman service and FSCS, in the same way they have access when receiving regulated investment advice on other investments.

At present, providing any advice to potential investors about the merits of investing in P2P agreements via loan-based crowdfunding platforms is an unregulated activity. Under the FCA's changes to legislation, it has confirmed that only authorised persons with appropriate permissions will be able to provide regulated advice on P2P agreements.

To ensure consumers understand whether they are receiving regulated or unregulated advice, firms will need to ensure that financial promotions clarify to potential investors situations where they are not providing regulated advice.

It clarified that firms holding themselves out as independent will not be obliged to consider P2P agreements when recommending retail investment products’ to a retail client.

It concluded that "with the sector still at an early stage of development, we do not consider it appropriate to make this a requirement at this time".