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

 


Proposed P2P business sale problematic for FMA licensing

Proposed peer-to-peer business sale problematic for FMA licensing

By Suze Metherell

July 10 (BusinessDesk) - The proposed $1 million sale of an unnamed, yet-to-be-licensed peer-to-peer lending and equity crowd funding platform may hit the skids as the licences are not transferable, the Financial Markets Authority says.

An online advertisement for an Auckland-based business claiming the company is a "fully functional web portal with advanced technology that provides for not only pure P2P (peer-to-peer) lending, but also other areas such as pledge based crowd funding" and has a licence application "well underway" with the regulator may become problematic as a change in ownership needs clearance by the FMA.

"If an applicant decides to sell or change ownership during the licensing process then we would require information on the new owners, to ensure they are able to meet the minimum standards required to obtain a licence," a spokesperson for the FMA said in an emailed statement. "The licensing process includes good character checks on the directors and senior managers, and we check they have the competence, skills and experience required for these positions and to deliver the service."

Peer-to-peer lending and equity crowd funding licences were introduced 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 or raised. The FMA received five applications, of which only one, Lendit, applied for both new capital raising licences.

Christchurch-registered Lendit was established by sole director John Walley in 2008 and counts entrepreneur Selwyn Pellett as a 12 percent stakeholder, according to documents lodged with the Companies Office.

Walley didn't respond directly to BusinessDesk's question as to whether Lendit was for sale.

"We continue to look at all options at this stage of business development," Walley said in an emailed statement. "We continue to work through the licencing process on P2P and crowd funding with the FMA, it is proving a bit time consuming and less than straightforward. We are ready to go once the licence work is done."

Walley said he was aware that any ownership change would need FMA approval, which was "to be expected under any sensible oversight regime".

"The requirements for operator A should be the same for operator B - or the oversight would be meaningless," he said. "That said, A and B might achieve what the FMA wants in different ways."

Walley last month described the licensing process as a "red tape fest" that was "excruciatingly complicated" and raised the possibility of giving up.

"We don't want to give up, I don't easily give up on things. I'm not known for walking away from controversy or difficulty," Walley told BusinessDesk in June. "It may well be that it all proves too hard for us, and then I wonder who will feel embarrassed?

"I've questioned on any number of occasions why does this have to be so complex, what is the risk that we're guarding against here?"

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 is still reviewing three other equity crowd funding licence applications after approving Auckland-based Harmoney for a peer-to-peer licence earlier this week. Those still waiting to hear from the regulator on their 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.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Company Results: Air NZ Rides The Tourism Boom With Record Full-Year Earnings

Air New Zealand has ridden the tourism boom and staved off increased competition to deliver the best full-year earnings in its 76-year history. More>>

ALSO:

New PGP: Sheep Milk Industry Gets $12.6M Crown Funding

The Sheep - Horizon Three programme aims to develop "a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030," according to a joint statement. More>>

ALSO:

Half Full: Fonterra Raises Forecast Milk Price

Fonterra Co-operative Group Limited today increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS. When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions. More>>

ALSO:

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news