Compliance Expert Says There’s Still a Place for AR in P2P
A compliance expert has claimed there is still a place for appointed representatives (ARs) despite the city regulator’s crackdown.
Mark Turner, managing director of Kroll’s financial services compliance and regulatory practice, said many RAs are following the rules and operating in line with regulator expectations, and will continue to “play a role in the future.”
His comments come after a period of scrutiny around the AR/main model.
In December, the Financial Conduct Authority (FCA) proposed tougher rules for AR oversight after finding a “wide range of harms” to consumers.
Then, in April, the watchdog created a new division to better oversee ARs and released its three-year strategy, which sets out its plans to “intensify” its monitoring of outsourcers to reduce “the most serious risks.” important” ARs.
Read more: Rules: Too much is never enough
Since February 26, 2021, Rebuildingsociety ARs have been unable to grant new loans, after the regulator raised concerns about the AR/principal structure for peer-to-peer lending platforms.
Yet several crowdfunding platforms still operate as an AR under the ShareIn main, including AxiaFunder, Energize Africa and LEO Crowdfunding and P2P lender Qardus.
Read more: FCA refuses to allow new director amid AR crackdown
“The crackdown was prompted by some major companies failing to meet FCA expectations, as well as some ARs caught up in various scandals, particularly in the area of customer promotions, marketing and selling inappropriate products. “said Turner of Kroll. .
“Scandals such as these have exposed weaknesses in the governance and oversight of major companies, which have undoubtedly been a big driver of the FCA’s attention in this area.
“There are many ARs and leading companies that are operating in line with FCA expectations, and they will continue to play a role in the future.”
Read more: Rebuildingsociety calls for greater FCA collaboration in AR loan ban