LONDON – Online lender RateSetter has been fully authorised by the Financial Conduct Authority (FCA).
RateSetter, one of the UK’s three biggest peer-to-peer lenders, announced on Tuesday that it has been authorised. It follows authorisation for the other big two platforms, Funding Circle and Zopa, in May.
RateSetter is a peer-to-peer lending platform that matches investors with businesses and consumers looking to borrow money.
Founded in 2010, the company has lent over £2 billion across its platform and has 250,000 active customers.
RateSetter applied for full authorisation in October 2015 and cofounder and CEO Rhydian Lewis said in a statement the process has been “a long but positive journey during which we have learnt a lot, improved our infrastructure and implemented important changes, notably making the business more transparent.”
RateSetter has increased the amount of market data it makes public and earlier this month announced plans to simplify early access for investors to their money.
FCA CEO Andrew Bailey told Business Insider in December that the “transparency and fairness” of peer-to-peer lending platforms were one of the “big challenges” of the sector.
RateSetter’s transparency has been in the spotlight recently following revelations about its lending practices. The company left industry group the Peer to Peer Finance Association in August after it was found to be in breach of the group’s transparency rules. RateSetter had invested in three businesses it lent to, telling customers only after the fact.
The Times also reported in September that RateSetter had been investing customer money into loans on rival peer-to-peer sites Wellesley and Archover, a practice that the FCA also warned it was worried about.
Lewis said in Tuesday’s statement: “Transparency is vital to our business because our customers need to understand what we do to appreciate the risk of lending on RateSetter.
“We are proud to receive full regulatory authorisation from the FCA. We have always aspired to have a regulatory framework for our business and our industry. We strongly support effective regulation to protect customers and enable industries to compete and grow.
“Authorisation is a milestone but not an end in itself and we look forward to working with the regulator and all stakeholders to continue to deliver good customer outcomes and to grow RateSetter.”
RateSetter is backed by City investment heavyweight Neil Woodford among others and appointed City grandee Paul Manduca to chair its board in May, fuelling speculation it could be gearing up for a stock market listing.