The Government has regular conversations with the Financial Conduct Authority (FCA) on a range of topics, including the regulation of equity crowdfunding.

In 2024, the government delivered the Public Offers and Admissions to Trading Regulations which enabled the Financial Conduct Authority (FCA) to reform the UK Prospectus Regime.This new regime took effect on 19 January 2026, and gives investors access to better quality information to support their investment decisions.

The regulations also created a new regulated activity of operating a Public Offer Platform (POP). Companies seeking to make public offers of securities outside a public market to a broad investor base, where the value exceeds £5 million, will now need to do so via a POP, ensuring investors receive better information about their investments.

The government does not comment on individual firms’ commercial activities.

In 2024, the government delivered the Public Offers and Admissions to Trading Regulations which enabled the Financial Conduct Authority (FCA) to reform the UK Prospectus Regime to make it simpler and more effective. This new regime took effect on 19 January 2026, and will give investors access to better quality information to support their investment decisions.

The regulations also created a new regulated activity of operating a Public Offer Platform (POP). Companies seeking to make public offers of securities outside a public market to a broad investor base, where the value exceeds £5 million, will now need to do so via a POP, ensuring investors receive better information about their investments.

Money received personally by an individual through crowdfunding, including for their political purposes, is generally treated as capital in Universal Credit, and can affect eligibility and payment amounts if a customer’s total capital exceeds £6,000. There are no plans to review these rules.

Treasury Ministers and officials meet with their counterparts at the Financial Conduct Authority often, as part of their regular engagement on various topics. This includes peer-to-peer lending, which the FCA is responsible for regulating.

Peer-to-peer investments are a higher risk investment where customers put their own capital at stake, without recourse to the Financial Services Compensation Scheme.

The FCA has investigative and enforcement powers and has commenced investigations into particular peer-to-peer collapses, certain of which are ongoing. This is also an area in which the Financial Regulators Complaints Commissioner has taken an interest and that work is ongoing.

The Ministry of Justice has published information on prosecutions and convictions relating to fraud offences, up to December 2019, available in the ‘Principal offence proceedings and outcomes by Home Office offence code’ data tool, here:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/938554/HO-code-tool-principal-offence-2019.xlsx

The Financial Conduct Authority (FCA) developed the Peer-to-Peer Lending Instrument 2019 in the exercise of the powers and related provisions in the Financial Services and Markets Act 2000.

In the data tool linked above, use the ‘Offence code’ filter in order to isolate the following offences under the Financial Services and Markets Act 2000, using their individual Home Office (HO) offence codes:

• 09508 - Provide false information to the Financial Services Authority
• 09976 - Triable either way offences (except those under classification 95/08) under Financial Services and Markets Act 2000
• 11401 - Summary offences under the Financial Services and Markets Act 2000

We are unable to disaggregate cases specifically referring to fraudulent peer-to-peer lending from other offences under the Financial Services and Markets Act 2000.

The Government takes matters of fraud extremely seriously. We continue to work closely with industry to close down the vulnerabilities that fraudsters exploit and ensure members of the public have the information they need to spot a scam and stand up to fraudsters.

We set up the Joint Fraud Taskforce to help build a collaborative law enforcement, government and industry response to tackling fraud. The Taskforce have already delivered on initiatives such as Take Five (the fraud awareness campaign). The Financial Conduct Authority’s (FCA) ScamSmart website also aims to help consumers protect themselves against investment scams, by allowing users to search a warning list to check an investment opportunity and report scams or unauthorised firms.

The FCA has a broad range of powers to oversee the peer to peer (P2P) and parts of the crowdfunding sectors. Moreover, P2P lending and investment-based crowdfunding are regulated activities under Financial Services Markets Act (FSMA 2000).

HM Treasury works closely with the FCA on an ongoing basis to understand what risks it has identified in the sectors it regulates, including the potential for an increase in fraud.

I was pleased to meet with the Honourable Lady on 19th October to discuss the FCDO's consular work. Advice on financial assistance for British Nationals abroad is longstanding and sets out all possible options British nationals may explore given the FCDO is not funded to provide financial assistance. We have recently reinforced to consular staff that while individuals may choose to crowdfund this is not an option we require them to explore before they seek an emergency loan to return home. The £75 million referred to was a maximum limit, not a target. We do not accept the Foreign Affairs Committee's suggestion that unspent funds meant those in need did not receive the repatriation support that they needed. The FCDO spent against the funding limit where needed to keep HMG charter flights affordable, in particular where there were fewer British travellers and where there was a need for connecting flights or significant ground transport. Our policy meant that we subsidised flights where it was necessary.

.

I was pleased to meet with the Honourable Lady on 19th October to discuss the FCDO's consular work.

Advice on financial assistance for British Nationals abroad is longstanding and sets out all possible options British nationals may explore given the FCDO is not funded to provide financial assistance. We have recently reinforced to consular staff that while individuals may choose to crowdfund this is not an option we require them to explore before they seek an emergency loan to return home.

The Government monitors the peer-to-peer (P2P) lending sector on an ongoing basis and engages regularly with P2P platforms and the Financial Conduct Authority (FCA), who are responsible for the regulation of the sector.

The Government believes that P2P providers deliver innovative forms of finance for both consumers and business, and can provide healthy competition in the financial services market and, as such, is keen to see the sector continue to grow and evolve.

P2P platforms are eligible to access finance under the Coronavirus Business Interruption Loan Scheme (CBILS) and Coronavirus Large Business Interruption Loan Scheme (CLBILS), where they can access loans up to £50 million under the latter, depending on the size of the platform. Under CLBILS, borrowers can apply for finance facilities, including overdrafts, of up to £25 million for businesses with a turnover between £45 million and £250 million, and up to £50 million to businesses with a turnover of over £250 million.

Those P2P platforms that facilitate loans to businesses can also apply to become accredited lenders under these schemes. More information on eligibility criteria and registering to become an accredited lender, can be found on the British Business Bank’s website here: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/become-a-cbils-accredited-lender/

The Government monitors the peer-to-peer lending sector on an ongoing basis and engages regularly with the Financial Conduct Authority (FCA), who are responsible for the regulation of the sector.

The FCA is operationally independent from Government. The second part of the question, as it relates to the FCA, has been passed on to the FCA. The FCA will reply directly to Lord Myners by letter, and a copy of the letter will be placed in the Library of the House.

I refer the noble Lord to the answer I gave him on 9 March to Question HL1776:

https://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Lords/2020-02-24/HL1776/.

The British Business Bank’s participation in peer-to-peer lending platforms has been primarily through the Bank’s commercial subsidiary British Business Investments. Data collected across the Bank’s programmes and delivery partners is consolidated on a programme-by-programme basis. The Bank does not record an overall rate of default given the wide range of delivery partners and products across the Bank’s programmes that are not directly comparable.

British Business Investments monitors existing delivery partners and their performance against contractual requirements, which includes monitoring the level of defaults, provisions, impairments[1] and write-offs observed through the life of each investment.

The level of default rates observed on the portfolio of loans generated through the peer-to-peer lending platforms have varied over the life of the investments to date, at times being below and at times being above the initial expected rate at the time of investment. Provisions are raised for defaulted loans but the actual level of losses associated with these defaults will be dependent on the level of recoveries achieved through the life of the investments as not all defaults will result in crystallised losses.

The level of losses provided for as a percentage of the net amount invested across the peer-to-peer platforms loan portfolio, is above the overall blended level[2] for the British Business Investments’ portfolio. This is as expected given the different risk profile and structure of the investments across the portfolio, all of which have been assessed within the Bank’s objectives and programme criteria.

Overall returns from investments through the peer-to-peer platforms have been positive and the Bank has not experienced any negative returns from the peer-to-peer platform investments liquidated to date.

[1] An impairment is an adjustment applied by a fund manager where a performance issue has been identified within a specific investment and are therefore included in the Net Asset Value submitted to the Bank.

[2] This includes the level of defaults, provisions, impairments and write-offs provided by peer-to-peer and non-peer-to-peer delivery partners.

The British Business Bank’s participation in peer-to-peer lending platforms has been primarily through the Bank’s commercial subsidiary British Business Investments. Data collected across programmes and delivery partners is consolidated on a programme-by-programme basis.

The value of new loans extended by the British Business Bank sourced through peer-to-peer lending platforms has increased year-on-year over the last three completed financial years.

Over the three year period, of the 15,420 distinct SME customers that have received financing through the peer-to-peer delivery partners of British Business Investments, 9.36% have been to repeat peer-to-peer customers[1]. The Bank does not hold data on how many peer-to-peer customers may previously have benefitted from other British Business Bank programmes.

[1] This data excludes finance through Market Invoice as a single customer could have multiple invoices funded through the platform at a time.

Across the range of income-related benefits, there are provisions to disregard payments received for the express purpose of effecting essential repairs to a home damaged by flooding, to make it habitable again, and intended to be used for that purpose. Monies raised though crowd funding have no impact on contributory benefits.

Gratuitous payments to people, made from a pot of funds raised by crowdfunding, will not be taxable income. To be gratuitous, there must be no agreement or expectation that the recipient will provide something in return.

The British Business Bank does not lend directly to SMEs. The Bank’s total exposure through peer-to-peer delivery partners was:

· £101.3m at 30 September 2019 (the latest data available), and

· £102.9m at 31 March 2019.

The Bank’s exposure contributes to loans to SMEs. In combination with other funders, the new loans it supported through peer-to-peer platforms were as follows:

· £268.7m of new finance to 2,738 SMEs in the six months to 30 September 2019 (the latest data available), and

· £705.4m of new finance to 7,794 SMEs in Financial Year 2018/19.

The Bank’s exposure to peer-to-peer delivery partners continues to provide finance to new SME borrowers.