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<p>The Government monitors the development of the peer to peer (P2P) sector and engages
regularly with P2P platforms and the Financial Conduct Authority (FCA), who are responsible
for the regulation of the sector. This requires platforms to be authorised by the
FCA and subject to FCA rules governing, among other areas, how they handle client
money and promote themselves to consumers, and capital requirements.</p><p> </p><p>The
regulatory status of Collateral (UK) Ltd, and the events which led to its register
entry appearing to show that it held an interim permission, when it did not, are matters
the FCA is investigating as they may involve fraud or misconduct by persons connected
with the firm who may have misused the register. In order to avoid prejudicing any
proceedings which may arise from the investigation, the FCA are unable to provide
further details of how they believe the change to the register came about.</p><p>
</p><p>The Financial Conduct Authority (FCA) is operationally independent from Government.
These questions relate to the FCA and have been passed on to them. The FCA will reply
directly to Lord Myners by letter. A copy of the letter will be placed in the Library
of the House.</p>
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