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Crowdfunders Face U.K. Crackdown as Regulators Find Faults

  • Five-month review cites problems around risk and transparency
  • Report comes amid surge in peer-to-peer lending in U.K. market
Light trails made by traffic passing around the Old Street roundabout, also referred to as 'Silicon Roundabout,' in the area known as 'Tech City' at dusk in London.

Light trails made by traffic passing around the Old Street roundabout, also referred to as 'Silicon Roundabout,' in the area known as 'Tech City' at dusk in London.

Photographer: Chris Ratcliffe/Bloomberg
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The U.K. Financial Conduct Authority said it’s considering new rules governing the crowdfunding industry after finding firms fell short of providing fair and transparent offerings to investors.

It’s "difficult" for investors to assess the risks and returns of investing on crowdfunding platforms that arrange loans or equity investments, the FCA said Friday in a statement on its website following a five-month review of the industry. The financial regulator also said that some peer-to-peer firms do not comply with requirements to be "clear, fair, and not misleading" in their promotions. The agency did not name specific companies.