RateSetter, a UK P2P lending platform, has raised £13 million in its latest round of fundraising as it prepares to launch its “innovative finance” ISA (IF-ISA). The IF-ISA allows investors, or lenders, to earn interest free of income tax. Before a P2P platform can offer its own ISA, it must be fully authorised by the Financial Conduct Authority (FCA).
This comes at a time of increased regulatory scrutiny of the P2P lending sector. There is growing frustration in the industry at the prolonged regulatory approval process for IF-ISAs. This is a function of high numbers of applications before the FCA and a high level of regulatory scepticism over this type of product.