12 December 2017
visit http://response.ncr.com

NZ regulator issues first P2P lending license

08 July 2014  |  1995 views  |  0 Source: Financial Markets Authority

The Financial Markets Authority (FMA) today issued its first peer-to-peer lending service licence.

Auckland-based Harmoney is the first provider of this new financial service, under the provisions of the Financial Markets Conduct Act 2013.

"This is a new service for New Zealand that brings new opportunities for lenders and borrowers. Peer-to-peer lending has already proved popular in Europe and US, and we've been able to build on that experience," said Elaine Campbell, FMA's Director of Compliance.

Licensing peer-to-peer lending services forms part of FMA's brief to facilitate new capital-raising opportunities in New Zealand. It is also part of the Government's business growth agenda.

"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 $2 million in any 12-month period through peer-to-peer lending services. This limit applies to both business and consumer borrowers - although individual service providers may impose lower limits on the amount that may be borrowed. The regulations don't impose any limits on the am amount lenders can lend, although some service providers may impose limits. Lenders should remember they may not be able to withdraw their money at short notice.

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.

Comments: (0)

Comment on this story (membership required)

Related blogs

Create a blog about this story (membership required)
visit www.aciworldwide.comvisit www.atos.netvisit http://info.nice.com

Who is commenting?

Top topics

Most viewed Most shared
Saxo Bank's 'Outrageous Prediction': Bitcoin to peak at $60k next year before spectacular crashSaxo Bank's 'Outrageous Prediction': Bitco...
11791 views comments | 7 tweets | 7 linkedin
Deutsche Bank paper hails 'huge' blockchain potentialDeutsche Bank paper hails 'huge' blockchai...
8720 views comments | 15 tweets | 21 linkedin
Santander UK poaches Barclays innovation chief Michael HarteSantander UK poaches Barclays innovation c...
7081 views comments | 8 tweets | 17 linkedin
Alior Bank to use Open API platform and accelerator to create fintech marketplaceAlior Bank to use Open API platform and ac...
6827 views comments | 20 tweets | 11 linkedin
PSD2: Laying the regulatory foundation for a new age in paymentsPSD2: Laying the regulatory foundation for...
6783 views comments | 17 tweets | 35 linkedin

Featured job

to £70K base, £105K ote, benefits
London, UK

Find your next job