The new ISA, which allows for peer-to-peer agreements, comes in next April and the Government also intends to make advising on P2P agreements a regulated activity.
The regulator has launched a discussion paper, outlining plans to introduce guidance on how information should be disclosed in relation to P2P agreements included within an IFISA.
The FCA is asking whether prospective investors in IFISAs should be given information on:
• what the tax consequences are if the P2P agreement is not repaid
• the tax consequences arising from an investor wishing to withdraw a P2P agreement from an IFISA
• the procedure for switching ISA manager.
An FCA statement, released today, said: “From April 2016 giving advice on investing in P2P agreements will be a regulated activity and firms providing the service will need FCA authorisation and will need to abide by FCA rules.
“As a result of the introduction of this new regulated activity, the FCA is considering whether its rules on the suitability of advice should apply to firms giving advice on P2P agreements.
“If the FCA decides to apply these rules in relation to P2P agreements, advisers would need to ensure that they take reasonable steps to make sure that personal recommendations are suitable for their clients.
“In addition, the FCA is considering making advice on P2P agreements subject to rules that ban the payment and receipt of commission.
“As with other investments subject to these rules, advisers would need to have a charging model for advice to invest that does not rely on the payment of commission. The rule changes would also prevent the payment of commission to platforms such as those run by self-invested personal pension scheme operators.”
If P2P platforms with ‘interim permission’ are able to offer IFISAs or become ISA managers, the FCA will consider whether further information should be disclosed to prospective investors outlining the risks.
The FCA is asking for views on how it should respond to the legislation on IFISAs to send them by 31 December.
The FCA will then consult on any changes once legislation is made.