UK Investment Group Propiteer has welcomed the Financial Conduct Authority’s (FCA) intervention into the marketing of mini-bonds.
Paul Hole, Compliance Manager at Propiteer said that this was long needed in a market where unregulated firms have been targeting retail investors with inappropriate products.
“We fully support the FCA’s objective to provide protection for retail investors. This is a sensible move by the regulators and will have little impact on our business as we already meet the FCA’s high standard required.”
Following a review of the mini-bond market, the FCA have placed a temporary ban on marketing that does not even attempt to meet the financial promotion rules, and are especially concerned about mass-marketing focussing on high rates of return, ‘insufficient emphasis’ on risk, or companies that suggest the regulator protects losses on their products. Andrew Bailey, Chief Executive of the FCA said:
“We remain concerned at the scope for promotion of mini-bonds to retail investors who do not have the experience to assess and manage the risks involved. This risk is heightened by the arrival of the ISA season at the end of the tax year, since it is quite common for mini-bonds to have ISA status, or to claim such even though they do not have the status.”
Propiteer, an Appointed Representative of MET Facilities, has issued over £35.7m of mini-bonds to date, with members always having their interest paid in full and on time, as well as returning investment capital when due.
In January 2020 Propiteer will launch their IFISA, which offers potential returns between 3-7% pa, and like other regulated firms it will meet the high level of due diligence and transparency that the FCA requires in the market.