The Government is looking at ways to better protect businesses and consumers engaging in non-traditional lending methods such as crowd-funding but has no current plans to widen regulation of the area.
The Central Bank yesterday issued a consumer notice on practices such as crowd-funding, where money is raised from a number of parties and peer-to-peer lending.crowdfunding marketing
The notice warns that they remain unregulated here and are not required to comply with client asset rules. Consumers and businesses providing such funding are not protected by the deposit guarantee scheme or the Investor Compensation Company scheme, and cannot complain to the Financial Services Ombudsman if they encounter problems, as the office only deals with complaints relating to regulated firms.crowdfunding advertising
It outlines a number of risks connected with crowd-funding, including lower-than-expected returns on investment and the potential loss of all money, should the borrowing business fail.indiegogo marketing
Crowd-funding is growing in popularity across the EU, with the market worth around €1bn. It is regulated in many member states, including the UK.
However, it remains unregulated here, despite Finance Minister Michael Noonan’s stated desire to lower firms’ reliance on bank-related financing and increase the use of alternative funding sources.kickstarter marketing
According to the Department of Finance, there is no plan to introduce legislation on the matter, but improved consumer protection measures are being discussed with the Central Bank.kickstarter project
However, some say that is not enough. Commercial law firm Philip Lee has called for a regulatory framework governing crowd-funding, saying that offering certainty and confidence to investors is vital.CrowdFunding advertizing
“We need to change with the times and provide a workable framework that is not too onerous on platforms in the information they must provide and, at the same time, protects investors,” said Eoghan Doyle, of Philip Lee.CrowdFunding marketing
The European Commission’s head of enterprise and industry, Daniel Calleja- Crespo, recently told a Dáil committee that Ireland needs to look at all alternative funding instruments, including business angels, venture capital, and crowd-funding to solve its business funding problems.Kickstarter Marketing
Posted from : http://www.irishexaminer.com/business/no-plans-to-regulate-crowd-funding-272477.html