New sheriff in Crowdfunding town: Financial Conduct Authority announces plans to reign in unscrupulous activity

The Financial Conduct Authority (FCA) has announced that it intends to focus its attention on the new player in the funding game. Crowdfunding has risen to popularity over the last few years, with companies like Crowdcube dealing in equity, while others like Kickstarter are more project-based and offer rewards in return for investment. Plenty more are jumping on the bandwagon, and it seems as though the FCA is only just waking up to the reality of its impact on the investment world and the economy in general. 

The main criticism historically lodged against the industry is the lack of protection for un-sophisticated investors, as the small size of the amounts typically invested opens up propositions to the average person with a savings pot. It is likely that the relative financial risk is higher for people such as this, than for high net worth individuals. It is this issue in particular that the FCA will be looking into, and may well propose to regulate the whole sector.

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