Financial Markets Conduct Regulations 2014

215 SDS for crowd funding service or peer-to-peer lending service

(1)

An SDS must contain a brief description of—

(a)

the nature of the service provided; and

(b)

how investors apply for, and obtain, access to the facility and the eligibility criteria that apply; and

(c)

how issuers apply for, and obtain, access to the facility and the eligibility criteria that apply; and

(d)

how investments are made and financial products are issued under the service; and

(e)

how investor money is received and dealt with; and

(f)

the nature and extent of the checks and assessments made by the provider of the following:

(i)

each issuer that offers financial products under the service:

(ii)

the directors and senior managers of those issuers:

(iii)

the risks involved in those financial products (or, if checks and assessments of those risks are not made as part of the service, a statement to that effect); and

(g)

the nature and extent of the disclosure arrangements that apply in relation to the financial products offered under the service; and

(h)

the charges that may be payable to the provider by an investor under the service (or, if those charges are not fixed, the types and bases on which charges will be imposed) and when the investor must pay the charges; and

(i)

the rights of the provider or any other person to alter any of the charges applicable to the service; and

(j)

the charges that may be payable to the provider by an issuer under the service (or, if those charges are not fixed, the types and bases on which charges will be imposed); and

(k)

if the provider is, or issuers that are associated with the provider are, restricted or prohibited from issuing under or using the service, the nature of the restrictions or prohibitions (see also subclause (2)); and

(l)

the nature and extent of any interest held by or in the provider that may materially adversely impact on the provider’s ability to have fair, orderly, and transparent systems and procedures for providing the service, and of the steps taken to manage any risks of that adverse impact; and

(m)

contact details of the provider; and

(n)

how investors may complain about the service to the provider and to any dispute resolution scheme that is available; and

(o)

the type of information relating to the service that is required to be, or otherwise will be, available on request from the provider and how the request should be made (including whether any charge may be made for the information and the amount of the charge).

(2)

If subclause (1)(k) does not apply in relation to the provider or issuers that are associated with the provider (or both), an SDS must also contain a statement to the effect that the provider or those issuers (or both) are not restricted or prohibited from issuing under or using the service.

(3)

An SDS for a crowd funding service must also contain the warning statement required by regulation 196.

(4)

An SDS for a peer-to-peer lending service must also contain—

(a)

a brief description of the nature and extent of the provider’s monitoring of compliance by the issuer with its obligations to make repayments and payments under the debt securities (or, if such monitoring is not part of the service, a statement to that effect); and

(b)

a brief description of processes in the event of a default by an issuer of those obligations or (if such processes are not part of the service) of the investor’s remedies in the event of a default.