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What the financial services bill means for the fintech industry

by LLT Editor
25th Jul 22 6:41 am

 For a long time, we’ve been witnessing businesses staying private for longer.

At Crowdcube alone, we saw £295m invested in 2021, a 44% increase on 2020.

Darren Westlake, co-founder and CEO, Crowdcube, said: “We also saw a 68% increase in £1m+ raises compared to 2020 which illustrates the rising amounts being invested into private businesses.

This trend shows no signs of abating, and so we therefore welcome and support the changes announced as part of the Financial Services and Markets Bill. Amongst other things, it proposes the removal of EU and related rules that require a prospectus for offering shares to the public, and the creation of a new regulated activity of offering securities to the public. The removal of the current requirement for a prospectus for offers over €8 million (in any 12 month period) will enable  businesses to raise as much as they wish through regulated equity crowdfunding platforms. This will be a welcome boost to Britain’s genuinely world-leading start-up scene.”

 

“However, before companies can take advantage of the benefits of this Bill in practice, the Financial Conduct Authority (FCA) will need to develop guidance and roll-out a new application process for platforms seeking to approve offers to the public. At a time when funding from other avenues is proving hard to come by, and other economic headwinds looking inevitable, it is crucial that the next administration ensures that the FCA prioritise this work and implement it in a proportionate manner, so that private businesses can take advantage of this innovative legislative change to turbocharge their growth and allow retail investors to maximise returns on the businesses they love.”

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