"This is a new service for
Licensing peer-to-peer lending services forms part of FMA's brief to facilitate new capital-raising opportunities in
"FMA's role is to regulate the companies providing peer-to-peer lending services. The service has great potential but lenders should also realise the risks are greater than putting money in a bank. Lenders can lose money or not get the interest they expect if borrowers fail to repay the loans."
Peer-to-peer lending involves an intermediary, the peer-to-peer lending service, bringing borrowers and lenders together, and charging a fee for the service. Lenders and borrowers can find out more information on FMA's website.
"To meet the required standards, service providers must provide clear disclosure for lenders and have fair, orderly and transparent processes around how they deliver their service. Applicants must also demonstrate they'll meet minimum standards of conduct. We are available during the process to help potential licensees understand their obligations," said Ms Campbell.
"Harmoney has shown itself capable of delivering the service and demonstrated how it intends to comply with its obligations as a licensee."
Under the regulations, borrowers are limited to raising no more than
FMA's role involves both licensing peer-to-peer lending services and monitoring their ongoing compliance with their legal obligations and licence conditions.
Borrowers using the service will not be individually checked by FMA, but the Financial Markets Conduct Act 2013 prohibits borrowers from making false or misleading statements, or unsubstantiated claims. Peer-to-peer lending services must exclude borrowers from using the service if they have reason to believe the borrower is in breach of these obligations.
The peer-to-peer lending service must be a member of a dispute resolution scheme - which customers can use at no cost - and must also have a complaints handling process.
Tips for lenders and borrowers - a Guide to Peer-to-Peer lending[https://www.fma.govt.nz/help-me-invest/getting-the-right-information/brochures/]
How to apply for a peer-to-peer licence[https://www.fma.govt.nz/help-me-comply/new-licences-for-financial-market-services/peer-to-peer-lending-services/applying-for-a-licence/]
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