As of the 9th December 2019 all regulated P2P platforms will be required to ensure that all lenders on their platforms complete an appropriateness test. Find out more about what this means for you.
2019 has been a challenging year for P2P lending platforms and the FCA is working hard to improve and raise standards across the industry to help protect lender interests. The rules will officially come into effect on the 9th Dec and will apply to all UK P2P lending platforms.
Many of the new rules regarding transparency were already part of our system. For example, on our platform the definition of a ‘default’ has always been a repayment that is 90 days past due. So many of the changes will affect other platforms more than ours.
Read more about the regulatory changes.
One of the more noticeable changes will be the mandatory requirement that all lenders go through an appropriateness test before they are able to make new investments on the platform. Whilst this rule will only become compulsory for all new investments from the 9th December, we’ve decided to implement it sooner.
What's the point?
If you're registered on multiple P2P lending platforms you'll be required to answer a test for each platform. Each platform is required to set out questions that a) highlight key risks of investing in peer-to-peer lending and b) highlight more platform specific features / risks.
Essentially the FCA want to ensure that anyone investing in P2P is made fully aware of the nature of their investments. This approach is not unique to P2P lenders, if you've made any other regulated investments or work with an independent financial advisor, you'll have completed something similar.
What to expect?
Thankfully, there's no need to spend hours revising. If you already use the platform, you’ll be able to answer the questions. The test takes less than 5 minutes to complete.
If you do happen to get a question wrong, we’ll let you know why your answer is incorrect, so that you’re not left wondering. We have set a pass mark of 60% for the test, and if you’re not quite on your game and happen to fall below this, you’ll be able to retake the test again.
Want to pass the first time?
To help you along in the test, there are resources to aid your understanding of P2P investing. Our Lender Library is full of useful articles. You might find the following pages useful in either updating or refreshing your understanding of how the platform works and the nature of the risks involved in investing.
- Understanding the Risks
- Our Credit Risk Assessment Process
- The Financial Services Compensation Scheme
Don’t worry, studying these before you take the assessment, or even after an unsuccessful attempt is not cheating. The point of the test is to help educate investors on the nature of Peer-to-peer lending and inform their understanding.
Questions?
If you have any trouble with the test, please contact with our team either by email through support@rebuildingsociety.com or 0113 8150244. Or refer to our comprehensive FAQs.
