FCA Regulation Plans Risk "Taking the Crowd Out of Crowdfunding"

Added by Love Business East Midlands | 14 February 2014

UPDATED: 4 June 2014

Speaking at a Westminster Hall debate on the 18th December, Labour MP Barry Sheerman warned there was evidence that a rush to regulate the sector in the US had “strangled the baby at birth,” and made it almost impossible for equity-based crowdfunding to carry on.

Barry Sheerman went on to say: “If we go down the United States route we will lose this opportunity to have one of the biggest growth sectors and most interesting phenomenoms of our modern economy…”

“It's demeaning to say you can only do this if you have a certain net worth or are a 'sophisticated' investor.”

“My constituents can go to a bookies and lose thousands in a day. They can go next door and borrow money at ruinous rates of interest from a payday lender. They can go online and gamble or spend a lot of money they haven't really got.

“Why can't ordinary people be able to put a fiver or £10, or even £50, small amounts in something they think will grow?”

Sheerman said he wasn't against regulation and had a good relationship with the FCA, but that he wanted to ensure regulation was appropriate.

“There is a sensible and commonsensical way of having regulation that doesn't do damage,” he said.

Treasury Minister Sajid Javid said he recognised Sheerman's concerns and that the government was working with equity crowdfunding platforms and the FCA to ensure regulation was proportionate.

Redrock can offer Bridging Loans and other forms of funding.

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