The Financial Conduct Authority (FCA) has posted a public request for feedback on regulation in the context of the social investment market. The FCA defines social investment as “investments where the aim is to provide a wider social benefit, rather than the primary driver being a purely financial benefit to investor”. The FCA asks for comments on this paper by 14 March 2016. The FCA will then consider whether it is necessary to clarify the requirements that apply to social entrepreneurs and the protection available to consumers for social investments.
The FCA is looking for clarification regarding:
- Explain the different structures a social enterprise in the UK can have and how our rules may apply.
- Ask for views about specific rules and policies which may be hindering investment for social purposes.
- Consider the appropriate protection for retail investors as it is important they appreciate the risks associated with these types of investments as they are likely to be less familiar with these products.
“The social investment market is developing quickly and regulation needs to keep pace. We want to explore the impact of our regulation to ensure it isn’t inappropriately restricting growth but continues to protect investors,” stated Christopher Woolard from the FCA.