Peer-to-peer lending providers
Peer-to-peer lending matches people who want loans with people who are potentially willing to fund those loans. The 'matching' is done via an intermediary - a peer-to-peer lending service.
Peer-to-peer lending is a type of financial market service covered by the FMC Act. The Act enables borrowers to raise up to $2million in any 12 month period, without having to issue an investment statement or prospectus (or a product disclosure statement from 1 December 2014). Some peer-to-peer lending services may restrict borrowers to smaller loans than the full $2million. Because borrowers will only get the funds they are seeking if there are people willing to lend it, there are no guarantees they will raise the money they are seeking to.
With a licence, you can provide services to borrowers who want to offer debt securities without supplying a product disclosure statement (PDS). By using your licensed service these borrowers can rely on an exemption in the FMC Act that means they don't need a PDS, although they must still meet all their other legal obligations.
Licensed peer-to-peer service providers have a number of on-going obligations, in addition to the minimum standards and standard conditions set out in their licence. These obligations include notifying the FMA of certain events and providing us with information.
Licensees obligations include notifying the FMA of certain events and providing us with information. All notifications should be emailed to the FMA at compliance@fma.govt.nz, noting the relevant obligation in the subject line of your email. You can notify us when a new director or senior manager is appointed by completing a notification form.
In your application, you'll need to demonstrate how you can meet the minimum standards and conditions for your licence - or ask us for a limit or variation using the forms below. This is very important because when a licence is granted, they contain conditions that support your licensee obligations. They include conditions imposed by the FMC Act, the regulations, and any conditions imposed by the FMA.
As a licensee, you will also have on-going obligations. For example, you must:
There will also be a number of other important obligations.
All licensed peer-to-peer lending provider is required to complete and submit an annual regulatory return. The return is a series of questions about your business and how your licensed service is used.
All licensees will need to submit their return to us by 30 August, for the 12 months to 30 June.
The information you provide us through the annual return helps us to:
Download the PEER-TO-PEER regulatory return submission form.
Normally if you want to borrow money direct from the public, the FMC Act requires you to issue a product disclosure statement.
All FMC reporting entities must comply with the following:
The FMC Act sets out minimum compliance standards of behaviour for people operating in the financial markets.
The fair dealing requirements apply to all aspects of licensed crowdfunding and peer-to-peer lending services. This guidance only focuses on communications made for the purpose of promoting, or informing customers about, an offer of financial products or financial services. Read more about fair dealing.
Download the Fair dealing in advertising and communications – crowdfunding and peer-to-peer lending guidance PDF.
The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act) imposes several obligations:
The FMA supervises designated business groups (DBGs) and reporting entities listed in Section 130 of the Act. See more
The FMA has wide powers to exempt persons or transactions from some financial markets law requirements. These powers enable us to remove rigidities in the law and ensure requirements for businesses are reasonable and cost-effective. Find out more about exemptions you can apply for under the FMC Act and current exemption notices.