UK Law and Practice Contributed by: James Burnie, Kathryn Dodds, Olga Antonova and Holly Joseph, gunnercooke llp
Giving advice in relation to unregulated crypto- assets is not regulated – only advice in relation to a security token is regulated. 3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers Generally, legacy players are seeking to use the brand of new robo-advisers to further their own businesses. This may be by making products available to robo-advisers so that customers are advised to participate in them, or it may be by making a robo-advice platform (which may be under a different brand) with a remit to sell products sold by the legacy player. In the sec - ond case, care needs to be taken to ensure that consumers are not misled into thinking that the advice they receive takes into account a broader range of products than that actually considered – and there is specific regulation to ensure that this is the case. 3.3 Issues Relating to Best Execution of Customer Trades The United Kingdom has implemented MiFID II , and as such has generally the same best execu - tion obligations as applicable to investment firms in the EU generally. Firms are required to deliver best execution taking into account factors such as price, costs, speed, likelihood of execution and settlement, size, nature or any other con - sideration relevant to the execution of an order.
Where a loan falls within the definition, for exam - ple, of “credit agreement” , being defined as the provision of credit to: • individuals; • partnerships consisting of two or three per - sons not all of whom are bodies corporate; or • an unincorporated body of persons which does not consist entirely of bodies corporate and is not a partnership, this is highly regulated, and there are prescribed obligations regarding matters such as the terms on which such agreement can be entered into, and as regards protecting vulnerable persons. Other loans which are not with consumers/retail may be completely unregulated, and so there are no such considerations. As such, if an agree - ment is not a regulated credit agreement, then it is unregulated regardless of the size of the bor - rower. 4.2 Underwriting Processes Where lending involves providing consumer credit, then the lender will need to be regulated by the FCA for this purpose and to comply with the FCA’s requirements for lenders. There is no such obligation in relation to unregu - lated lending. 4.3 Sources of Funds for Fiat Currency Loans There is no specific regulation regarding what the source of funds should be for a loan, how - ever depending on how the loan in financed, this may trigger regulation. In this respect, it is noted that if money is borrowed from one person and then on-lent to another person, this may well constitute the activities of running a collective investment scheme (if there is a look-through to
4. Online Lenders 4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities
There are substantial differences between loans to individuals and loans to corporate entities.
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