The Financial Conduct Authority (FCA) has been in discussions with businesses in the P2P market about their marketing activity, according to a report by the Financial Times. The newspaper said concerns had been raised about whether some P2P platforms had sufficiently explained the risks of investing via their platforms.
Financial regulations specialist Michael Lewis of Pinsent Masons, the law firm behind Out-Law.com, said that all regulated firms are subject to rules on financial promotions.
"An operator of a P2P platform is subject to the financial promotion regime and the 'principles for businesses' including principle seven – that a firm must pay due regard to the information needs of its clients and communicate information to them in a way which is clear, fair and not misleading," Lewis said. "There are precedents for prescribing the form of marketing material but generally it is up to a firm to ensure that its marketing is not misleading."
According to the Financial Times report, the FCA said: "The quality of the information provided to consumers in marketing is something that we [have] concentrated on, and we have been working closely with peer-to-peer firms on this issue. Our supervisory teams regularly review the marketing of regulated firms, and where there are concerns they can ask for materials to be withdrawn or changed."