Late last week Collateral, the Manchester based peer to peer lender entered into Administration with an estimated £21m of investor money at risk. It appears there were regulatory issues which led to the loss of their interim permission from the FCA.
The failure illustrates the importance of on-going compliance for platforms and the potential risks to investors of investing in this nascent sector. With £21m of investor monies tied up in the administration it will be a worrying time for investors, although early comment from the Administrators suggests that on this occasion they are confident that funds will be fully recovered.
Clearly these comments will be welcomed by investors, however the failure illustrates the importance of standby service operators, with strong standby agreements ensuring an orderly wind down, thereby protecting investors and providing assurance to regulators.
RSM’s standby service is specifically designed for the emerging peer to peer market and has been approved by a number of high profile clients and investors. RSM’s experience of orderly wind downs demonstrates the value of this service.
Please contact James Parkinson of RSM to discuss our bespoke Standby Service in more detail.
To keep up-to-date with the latest insight and events, please click here.