MEMA Scope · Assessment

Do crowdfunding and peer-to-peer lending platforms need FCA authorisation?

A platform lets people lend money to individuals or businesses, or invest in start-ups and projects, and typically manages the payments. Review the initial view below and answer a few questions to refine it.

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Initial viewProvisional assessment

Potential regulated activity identified

Operating a lending platform may require FCA authorisation

Loan-based platforms need authorisation. Appointed representative status is not available for loan-based crowdfunding activities.

Route to consider: Direct authorisation (full permission)

Operating a Loan-Based Crowdfunding / P2P Platform

Why this was flagged

1Operating an electronic system that enables lenders and borrowers to enter into agreements, with payments passing through the platform, is regulated.
2Investment-based crowdfunding is a different regime based on arranging and dealing activities.

Questions still to resolve

Answer to refine the view. The result updates as you go.

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Do investors lend money to borrowers, rather than buying shares or other securities?
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Do you or someone acting for you collect repayments from borrowers and pass them to lenders?
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Do you operate under an authorised firm that takes regulatory responsibility for you?

Regulatory basis to examine

RAO Art.36H Operating an electronic system in relation to lendingOperating an electronic system in relation to lending FCA: Loan-based crowdfunding platforms, summary of our rulesFCA: loan-based crowdfunding platforms PERG 2.7 Activities: a broad outlinePerimeter guidance (PERG 2.7)CASS 7 Client money rulesClient money rules

Your next steps

1Confirm whether your product is loan-based or investment-based
2Design client money handling for repayments
3Plan platform wind-down and loan servicing continuity
4Prepare creditworthiness assessment and promotions controls

Where applications for this model most often fall short

A credible platform wind-down plan
Client money handling and reconciliations
Borrower due diligence and creditworthiness assessment

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This is an initial indication from published FCA material, not an FCA determination or legal advice.

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Ask about an activity, exclusion or FCA requirement. Answers come only from vetted profiles, FCA Handbook and legislation extracts and MEMA guidance, and every answer cites its source.

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Continue with a more detailed readiness assessment

If authorisation is required, check the firm’s governance, policies, resources and application preparedness.

Will the FCA Authorise Us?

MEMA Scope gives an initial view from published FCA material. It is not legal advice or an FCA determination. Automatic matching and typed questions use AI only to choose a profile and to answer from vetted guidance; the assessment itself is never written by AI.

About this business model

A platform lets people lend money to individuals or businesses, or invest in start-ups and projects, and typically manages the payments.

Loan-based platforms need authorisation. Appointed representative status is not available for loan-based crowdfunding activities.

This page gives an initial view from published FCA and legislation sources. It is not an FCA determination or legal advice. Not your business model? Describe your business in MEMA Scope.

Crowdfunding or peer-to-peer lending platform: frequently asked questions

Do peer-to-peer lending platforms need FCA authorisation?

A platform that operates an electronic system enabling lenders and borrowers to enter into agreements, and that collects and passes on payments, is carrying on the regulated activity in RAO Art.36H and generally needs authorisation.

Is equity crowdfunding regulated differently?

Investment-based crowdfunding is generally assessed as arranging or dealing in investments rather than operating a lending system, so different permissions and rules apply.

What could change the answer for crowdfunding and peer-to-peer lending platforms?

Loan-based platforms need authorisation. Appointed representative status is not available for loan-based crowdfunding activities. It can change depending on the answers to questions such as: Do investors lend money to borrowers, rather than buying shares or other securities? Do you or someone acting for you collect repayments from borrowers and pass them to lenders? Do you operate under an authorised firm that takes regulatory responsibility for you?

Which FCA rules should crowdfunding and peer-to-peer lending platforms look at first?

Start with: Operating an electronic system in relation to lending; FCA: loan-based crowdfunding platforms; Perimeter guidance (PERG 2.7); Client money rules. This is an initial view from published FCA material, not an FCA determination.

What are the first steps for crowdfunding and peer-to-peer lending platforms?

Confirm whether your product is loan-based or investment-based. Design client money handling for repayments. Plan platform wind-down and loan servicing continuity. Prepare creditworthiness assessment and promotions controls.

Businesses we check

MEMA Scope covers 32 common business models. Each page explains whether that kind of business may need FCA authorisation, the rules to look at and the routes to consider.