During the consultation, the ACF was also asked whether P2P agreements were considered complex and whether a adyne review was therefore appropriate when a sale was not recommended. According to the CFA, consultants must take appropriate steps to ensure that their personal recommendations on P2P investment opportunities are appropriate for their clients and other incentive rules apply. Those who advise p2P agreements must also be “properly monitored and deemed competent to carry out this activity (including obtaining an appropriate qualification),” he said. If you decide that your business will not be advised on P2P agreements now or in the future and you want to remove the authorization, you can submit a variation of the authorization request via Connect. Learn more about the new authorisation of the regulated activity of “advice on P2P agreements” and what this means for your company`s approvals The regulator has also stated that its approach to regulating consultation on P2P agreements may change in the future. It indicated that it would review the recommendations of the latest financial advice market review and determine whether a modified approach was necessary. The FCA`s March 2016 policy statement (PS16/8), which dealt with the separation of client money on credit-based crowdfunding platforms, IFISA and regulated advisory activities under the P2P agreements, also extended this requirement to personal recommendations regarding P2P agreements as of April 6, 2016. Some companies had argued that they would not be able to perform appropriate due diligence for P2P agreements, making them more difficult or impossible to comply with. They also argued that there would be little point in providing advice on P2P agreements, as it would be difficult to measure the risks associated with them, so that most investments would not be “advised”.
Unsurprisingly, the ACF rejected these arguments: “… We think it`s important for companies to think about the research and care they need to take to make sure they know the nature and risks of the products they choose for customers… We expect a consultant to understand the differences in risks between different types of products, especially those that may seem similar. For example, consultants should take into account the risks associated with P2P agreements in relation to bank deposit accounts or bank or construction deposits… Our current rules also define situations in which companies can rely on other people [see z.B COBS 2.4.6R]. It is generally reasonable for a company to rely on information provided in writing by an unrelated mandated person or by a professional company, unless it knows or should reasonably know that a fact that would call into question the accuracy of that information would be a legitimate reason to question the veracity of that information… Consultants should form their own opinions on investment risk and advise their clients on the basis of this opinion.