Brexit may be officially “done” – although the negotiations and the attempts to ameliorate the trading damage continue apace. Meanwhile the UK FinTech sector is necessarily affected by what happens in Europe. No man – and no industry, certainly – is an island.
European securities regulator, the European Securities and Markets Authority (ESMA), has issued a “call for evidence” on digital finance.
According to a statement posted by the ESMA, they are seeking information on “value chains,” platforms, and financial/non-financial services. The initiative is part the EU’s goal of providing better financial services to a wider range of businesses and investors, possibly at a lower cost.
ESMA notes that its advice to the European Commission will assist them to address challenges such as areas of risk, and where relevant, changes to the existing legislative framework by mid-2022.
ESMA is requesting information on three topics:
The call for evidence by the ESMA is open until August 1, 2021, and seeks feedback from all interested stakeholders, including financial services firms, tech firms and other interested parties. ESMA says it will consider the information received through this call for evidence when drafting its advice to the EC.
Historical Performance And IFISA Process Guide
That figure is the result of over £20 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
The ISA allowance for 2020/21 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.