HomeFWJ TakeawayResourcesIs crowdfunding regulated?

We frequently get asked by our clients “is crowdfunding regulated” or whether crowdfunding is in fact unregulated. Crowdfunding is mostly unregulated although from 1 April 2014 the Financial Conduct Authority (FCA) started to regulate some forms of crowdfunding in the UK.

The FCA regulates:

  • Loan-based crowdfunding: also known as ‘peer-to-peer lending’, this is where consumers lend money in return for interest payments and a repayment of capital over time; and
  • Investment-based crowdfunding: consumers invest directly or indirectly in new or established businesses by buying investments such as shares or debentures.

The FCA also regulates payment services provided in connection with:

  • Donation-based crowdfunding: people give money to enterprises or organisations whose activities they want to support; and
  • Pre-payment or rewards-based crowdfunding: people give money in return for a reward, service or product (such as concert tickets, an innovative product, or a computer game).

Our expert team of crowdfunding solicitors at Francis Wilks & Jones are here to help you with any business advice or assistance you require. Contact our team today.

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