Mon, Mar 30, 2020

Geoff Bouchier and Mark Turner Speak to Peer2Peer Finance News About Potential Platform Closures

Geoff Bouchier, Managing Director in Duff & Phelps’ Global Restructuring Advisory practice and Mark Turner, Managing Director in Duff & Phelps’ Compliance and Regulatory Consulting practice, spoke to Peer-to-Peer Finance News about the potential economic impact of the coronavirus (COVID-19) on peer-to-peer (P2P) platforms, if investors lose confidence in small business lending.

Geoff commented, “Coronavirus is causing significant and increasing disruption across all business sectors, including P2P platforms. Success for many platforms is dependent upon the attraction of retail investors to fund loans, principally to small- and medium-sized enterprises (SMEs). The question then becomes whether investors still have confidence in lending to SMEs in the present uncertain economic environment. If the investors retreat, then the platforms will lose revenue whilst still being faced with fixed overheads, eroding their capital reserves.”

Following the recent introduction of the Senior Managers and Certification Regime (SMCR), senior managers are now more accountable for platform management and wind-down decisions. 

Mark added, “It is possible, particularly where customer detriment occurs, which is more likely under current market conditions, that the Financial Conduct Authority (FCA) may ask questions of senior managers even after they are no longer in that role—for instance, where the platform goes into administration or where the senior manager resigns. FCA action can ultimately include fines and restrictions on future roles that can be held by individuals within the financial services industry.”

Read the full article here.


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