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Bond crowdfunding platform UK Bond Network said on Wednesday it has obtained a license from the UK Financial Conduct Authority (FCA). Prior to getting fully licensed, the platform operated under an Appointed Representative temporary authorization.
According to the FCA register, UK Bond Network’s license is effective as of 19 September, 2016.
The platform seeks to grow its business and expand its investment solutions. It considers launching new offering investments which would qualify for the Innovative Finance ISA (IFISA), a program for tax-free peer-to-peer (P2P) lending.
“Proper standards are at the heart of our offering, so gaining FCA authorization fulfills a key element of our growth strategy,” Christopher Maule, UK Bond Network’s CEO and Founder, said. “[…] full authorization is a further significant, very positive differentiator for us,“ he added, noting that with the full license the platform will reach out to a much wider audience.
As of 6 April this year, the IFISA allows UK investors to lend money using FCA-regulated crowdfundingplatforms and receive interest and capital gains tax-free. Otherwise, all lending interest is subject to taxation. P2P lending is not protected under the Financial Services Compensation Scheme (FSCS) and lenders’ capital is at risk. The IFISA provides support to some degree to lenders, but only of the lending platform they use is fully licensed.
UK Bond Network is a bond crowdfunding platform that links institutional investors with UK business borrowers through an online bond auction. Small and mid-sized enterprises (SMEs) can raise between £500,000 and £4 million via the platform by issuing bonds and selling them to multiple investors. Investors, on the other hand, bid to lend to small and mid-sized enterprises (SMEs) from a minimum £5,000 and typically get a gross return on investment of 7%-14%.
The UK crowdfunding market falls under the scope of the FCA since April 2014. Last month, peer-to-peer (P2P) lending platforms Lending Works and LendingCrowd announced it also received full authorization in the UK. To see some of the leading UK market participants click here.