Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Harmoney gets first peer-to-peer lending licence

Harmoney gets first peer-to-peer lending licence

By Suze Metherell

July 8 (BusinessDesk) - The Financial Markets Authority has awarded its first peer-to-peer lending licence to Harmoney, and expects to license an equity crowd funding platform "shortly".

Auckland-based Harmoney is the first platform operator to receive a licence under the new Financial Markets Conduct Act, which came into effect on April 1, providing a regime to match lenders with borrowers, with a $2 million cap on the amount allowed to be borrowed. The new legislation also allows for equity crowd funding, with the possibility to raise up to $2 million on the crowd sourcing platforms. The FMA is still reviewing four other potential licences, including three equity crowd funding applications and one for both peer-to-peer and crowd funding platforms.

"We do expect we will be in a position to be licensing an equity crowd funding platform quite shortly, we're just working through some final issues with the applicant," Elaine Campbell, FMA director of compliance told BusinessDesk. "To an extent the applicant is driving the timetable in that regard."

Those still waiting to hear from the regulator on their equity crowd funding applications include Wellington-based PledgeMe, the crowd funder looking to expand into equity offerings, Armillary Private Capital, which has partnered with the UK-based Crowdcube, and Auckland-based Snowball Effect. Lendit, which counts entrepreneur Selwyn Pellet as an investor, has applied for both licences.

Harmoney, which operates an online platform, will match individual borrowers, rather than businesses looking for capital, with lenders, and determine the interest rate on the loan based on the credit risk of the borrower. The platform is yet to set an official launch date.

"We couldn't be more excited to lead the charge and shake up New Zealand's personal lending market with a new competitive and technologically advanced investment and lending platform," Harmoney chief executive Neil Roberts said in a statement.

The licensing is part of the regulator's expanded brief to bolster New Zealand's capital markets but the new platforms do carry risks for lenders. Much of the licensing process has been ensuring platforms in both equity crowd funding and peer-to-peer lending inform investors of the risks and the regulator will continue to monitor businesses' compliance with their licences.

The FMA's Campbell said lenders need to understand the risk associated with their investment.

"The peer-to-peer platform must have a debt collection process in place and one of the other criteria is that the platform has got to disclose the default rates of the loans they're making," Campbell said. "So it is important that people who are wanting to lend money do pay attention to that disclosure and understand what checking the platform has done of the borrowers."

The licensing process requires businesses build the platform to fit the regulations, but is not prescriptive on how the platform might operate. Campbell said the process was new, and the regulator had sought to be facilitative throughout.

"Given that these businesses are new, clearly they haven't been able to operate in New Zealand before in the equity space, we are dealing with primarily start-up companies," Campbell said. "The process was clearly new for them and to that extent perhaps understanding the expectations of the regulator had been a dialogue that we've engaged in with them but we have been available for all of the applicants."

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Retail: Pumpkin Patch Brand, IP Sold To Catch Group

The receivers of failed children's clothing retailer Pumpkin Patch have confirmed that the company's brand and intellectual property have been sold to Australian online retailer Catch Group. More>>

ALSO:

Oil: 2017 Block Offer Petroleum Tender Launched

New Zealand is well-placed to take advantage of the economic benefits of oil and gas exploration, Energy and Resources Minister Judith Collins announced today at the launch of the 2017 Block Offer petroleum tender. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news