The UK’s financial watchdog, the Financial Conduct Authority (FCA), has issued a proposal that would permit “loan based crowdfunding platforms”, which include peer-to-peer (P2P) lenders, more flexibility in how they handle money from their investors.

At present, money from investors destined for loans must be segregated from the P2P company’s own money and other assets, but the regulatory authority has received complaints from a number of platforms that this regime is too administratively burdensome.

In a statement, the FCA said: “We understand that some firms consider this burdensome as firms in the peer-to-peer (P2P) industry have generally not developed systems to distinguish between money held for the purposes of P2P agreements and money held for business-to-business (B2B) agreements.”

The statement continued: “We propose to allow firms that hold money in relation to both P2P and B2B agreements to be able to elect to hold both kinds... Firms may then segregate P2P and B2B monies together, but separately from the firms' money.”

A number of the country’s P2P lenders offer borrowing options to both individual consumers and businesses, including the UK’s unique secured asset loan platform, Unbolted.

Currently, under a rule known as CASS 7, all financial firms in the UK are obliged to segregate client money. The new FCA proposal will mean that should a platform elect to hold all B2B and P2P monies under CASS 7, all of its B2B funds will be held as client money and the platform will be unable to rely on the professional client opt-out.