In a 17-page discussion paper published today (12 November), the regulator set out how it plans to change rules ahead for the introduction of a new type of Isa.
The government plans to allow P2P lending to be included in Isas, in a new component to be known as an Innovative Finance Isa, from 6 April 2016.
At this time the FCA stated it will not make advice on P2P agreements subject to all requirements arising from the Retail Distribution Review.
In particular, the paper explained that it would not be appropriate to require firms holding themselves out as independent financial advisers to consider investment in P2P agreements when making personal recommendations to clients.
Advisers will also not have to have appropriate qualifications specific to this type of business -standard qualification requirements for advisers will still apply - if they wish to recommend investments offered on loan-based crowdfunding platforms.
However, if in the future advice about investing in loan-based crowdfunding becomes more commonplace and supervision work reveals concerns with the quality of that advice, the FCA could review this position and may consider introducing new requirements.
Rules to ban the payment and receipt of commission are also proposed.
As with other investments subject to these rules, advisers would need to have a charging model for advice to invest that does not rely on the payment of commission. The rule changes would also prevent the payment of commission to platforms such as those run by self-invested personal pension schemes
At present providing advice on P2P agreements is not a regulated activity.
The discussion paper comes as the government has indicated it intends to amend the law so that only authorised persons may provide such advice from next April.
It stated individuals in retirement, who may have significant sums in savings and may be concerned about low interest rates, could invest significant amounts in loan-based crowdfunding platforms, potentially taking inappropriate levels of risk with their money.
When it comes to recommending the new Innovative Finance Isa, the FCA stated prospective investors will need to be made aware of the tax consequences if a loan held in an IFIsa is not repaid, or if the Isa manager or firm operating the platform fails.
Back in September, FTAdviser revealed around £350,000 worth of Sipp money, across several trustees, has been lent via Ratesetter, all of which came through the non-advised route.