Zopa Get Fully FCA Authorised
Peer-to-peer platform giant Zopa has been busy of late after achieving full authorisation from the Financial Conduct Authority (FCA), on 11 May this year, announcing on 25 May that it would be axing its safeguard fund, and on 1 June, confirming it had completed the £32m funding round that would bring it one step closer to opening its “next generation bank”.
But back to the business of authorisation. FCA approval means the platform is that huge step closer to its ISA launch. As such, alongside its safeguard axing announcement on 25 May, the platform gave some details of its IFISA offer:
“Pending final approval from HMRC, we’re excited to announce our flexible Innovative Finance ISA (IFISA) – with target returns of up to 6.1% – will be available from 15th June.”
Zopa says that because it expects demand to be high, it has offered existing investors priority access ahead of new customers. It even has a three-step timeline for onboarding investors into the ISA:
- From 15 June: Existing investors can invest new money into ISA products
- 1 July to 31 July: Existing investors can sell their existing Zopa loans and transfer into ISA products without a selling fee
- From 17 August: Existing investors can start transfer-in of existing ISAs from other providers, including historical and current ISA investment
Before even the Government’s IFISA announcement, Zopa has stated that it had been “pushing for ISA inclusion for a number of years”. The platform declared its intention to release an ISA in July 2015, shortly after the Government revealed the new, tax-free product in its Summer budget. This means it has waited nearly two years to be able to release it product, and with HMRC approval hanging in the balance, the wait is of course not yet over.
“The authorisation process has been rigorous and in-depth and involved extensive scrutiny of our business,” said Jaidev Janardana, Chief Executive at Zopa.
It is the second of the ‘big’ peer-to-peer ISA providers to achieve authorisation after Lending Works became authorised back in October 2016 and launched its product in February of this year. The third peer-to-peer giant to get FCA approval was Funding Circle a mere two weeks after Zopa. Now just Ratesetter is the last of them to be waiting for the regulatory green light.
Zopa has said that further details of its IFISA will be announced following HMRC’s decision, but its said this before its recent announcement on 25 May, so only time will tell what else potential investors will learn about the upcoming ISA.