Peer-to-peer finance regulator launched
Self-regulatory body launched covering peer-to-peer finance market, in what is described as a "significant step" for the sector.
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The Peer-to-Peer Finance Association, a new trade body for the peer-to-peer finance sector, has officially launched today (15 August).
The association is a new UK trade body set up primarily to ensure the sector maintains high minimum standards of protection for consumers and small business customers.
As new financial regulatory structures are put in place by the government over the next 18 months or more, the Peer-to-Peer Finance Association said it would work hard to ensure that the new rules will include effective regulation for the peer-to-peer finance market.
The initial members are Funding Circle, RateSetter and Zopa - the largest peer-to-peer finance platforms at present in the UK.
The Peer-to-Peer Finance Association claimed other providers were known to be interested in seeking membership in the near future, subject to meeting the required standards.
The association has established a wide definition of peer-to-peer finance providers as: "Platforms that facilitate funding via direct, one-to-one contracts between a single recipient and multiple providers of funds, where the majority of providers and borrowers are consumers or small businesses."
The Peer-to-Peer Finance Association is run by a management committee, made up of one representative from each member, with one member acting as chairman for one year on a rotating basis. Giles Andrews, chief executive of Zopa, will act as the committee’s initial chairman.
Mr Andrews said the association was pleased to be taking this "significant step" in the evolution of the sector.
He said: "The association recognises that this fast growing market will benefit from the high standards that the Peer-to-Peer Finance Association has laid down and will police amongst its members.
"Launch of the Association reflects that the peer to peer alternative to conventional banking not only delivers innovative new ways to provide better value for its customers, but is also committed to the highest standards of safety, transparency and customer protection."