FCA consults on removing barriers to social investment

15 Dec 2015 News

The Financial Conduct Authority, the consumer finance regulator, has opened a consultation into regulatory barriers to social investment.

The Financial Conduct Authority, the consumer finance regulator, has opened a consultation into regulatory barriers to social investment.

The FCA call for input includes a proposal which could allow ordinary consumers to “self-certify” themselves as social investors, meaning that normal strict rules about marketing financial products would not apply to communications from charities and social enterprises.

Social investment organisations have questioned current regulations governing communications between social sector bodies and ordinary consumers who might want to lend money into the sector.

They say the rules currently make it harder for charities to ask supporters to make an investment – with a possibility they might get their money back – than to make a donation.

The FCA sent out its call for input after receiving feedback on its regulation of crowdfunding from organisations working in the social investment sector.

It said in a statement: “Practical ideas we have heard to date include creating a consistent minimum standard for social offers and enabling a new self-certified class of social investors to make a declaration about their social motivations and risk threshold which enables them to access such offers (perhaps subject to a maximum investment threshold).

The call for input will close on 14 March next year.

 

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