A new report by NextGen Crowdfunding documents increasing use of Reg. A+ as the regulatory umbrella for real estate crowdfunding and other financial offerings; Reg. A+ was finalized in June 2015 as a means for non-accredited investors to access private offerings; companies can raise up to $50 million per year under Reg. A+; across all sectors, 131 companies to date have filed under Reg. A+, with 38% of these filings being by real estate and financial services platforms and many others being IT startups; roughly half of the filers are using "Tier 1" rules for Reg. A+, meaning they will continue to register in individual states as well as at the federal level, and half are filing "Tier 2", seeking national fundraising scope while avoiding the added prudence of vetting against state rules. Source
President Donald Trump has issued an executive order requiring the Treasury secretary and regulators to come up with a plan to overhaul Dodd-Frank and its over 400 regulations; the banking industry's tighter regulations have been a factor helping the success of marketplace lenders since the financial crisis and deregulation in the sector could create new challenges and increased competition for marketplace lenders; as the government begins to take deregulatory actions for traditional banks it also seems that marketplace lending has reached a phase likely to see increased regulations and involvement from regulators; these two forces along with other market factors could change the competitive landscape for the marketplace lending industry. Source
Chinese regulators raided over 40 companies in China to investigate for illegal activities pertaining to the country's newly disseminated laws; investigators found property agents listing homes that owners had not agreed to sell and providing false information about properties; with a focus on real estate property investing, the investigators also found P2P lenders offering down payment loans after they were recently restricted by regulators. Source
2016 could be the alternative finance industry's first net negative year according to AltFi; uncertainty in capital investment was a substantial factor for the first time causing a renewed focus on retail investment; CEO turnover has been a significant factor with Renaud Laplanche's resignation a catalyst for decreased investor confidence; regulators have also caused market uncertainty with new regulations potentially adding compliance burdens for alternative finance businesses; macroeconomic factors including Brexit and the US presidential election have also increased pressure on alternative finance; despite hardships, sentiment for 2017 is mostly positive with 2016 seen as only a temporary retrenchment. Source
