we launched the Triodos crowdfunding platform in 2018 we were delighted to be
able to offer a new way for sustainable businesses to raise capital to grow their
operations so that they can have, or continue to have, a positive impact on
people and the planet. We were the first bank in the UK to launch its own
crowdfunding platform - connecting investors directly with positive organisations
seeking finance, and offering this through an Innovative Finance ISA (IFISA).
The media has widely reported on the
Financial Conduct Authority (FCA) – recent (26 November 2019) ban on the
marketing of ‘speculative mini bonds’ to retail investors. This has been put in
place to address the risk of consumer harm from the promotion of these type of
The Triodos crowdfunding platform is
regulated by the FCA (as part of Triodos Bank UK), however what we offer are
not such ‘speculative mini bonds’ and so we are therefore unaffected by this
‘Speculative mini bonds’ are defined
as bonds or preference shares where money is used to lend to third parties,
invest in other companies or in speculative property development. The FCA specifically
recognises the difference between these types of capital raises (by newly
created companies for the purpose to on-lend), versus investment capital raised
by real businesses to grow their own operations.
However, we very much welcome the
FCA’s moves to restrict the sale of these types of complicated on-lending
structures and believe they must effectively enforce existing rules around the
promotion of investments to make the so-called P2P market safer for retail
Alternative finance channels, such
as triodoscrowdfunding.co.uk and peer to peer lending platforms have been
critical to supporting SMEs in the UK. We’re legitimate, authorised investment
crowdfunding platforms offering investments that are structured to be
appropriate for retail investors. As the Cambridge
Alternative Finance report stated, in 2017 alternative
finance provided £4.2 billion of business funding to SMEs in the UK. It is a
vital part of the finance ecosystem.
As with any investment, it is vital
that investors do understand the risks, and we welcome the FCA’s proportionate
approach to regulation and protecting customers from potential harm, especially these speculative investments that
aren’t always as they appear.
We will continue to pride ourselves
on our transparency - it’s embedded in our nature and in the essence of every
product we offer. We clearly state the risks of investments that we promote so
that our investors understand what they are investing in. The best interests of
our customers and clients are always at the forefront of what we do, and they
always will be.