FS16/11: Feedback on Regulatory Barriers to Social Investments

In this Feedback Statement we summarise the responses we received to our Call for Input on how regulation is working in relation to the social investment market, and outline our responses to the issues raised.

Show FS16/11: Call for Input on regulatory barriers to social investments (PDF)

Why are we issuing this Feedback Statement?

We are publishing this feedback from last year’s Regulatory Barriers to Social Investments Call for Input . The Call for Input considered possible challenges to the growth of the social investment market, including:

the problems faced when establishing social enterprises and raising capital in them

what might stop financial advisers offering social enterprise products to investors

the issues faced by consumers when seeking to invest in social enterprises

The Feedback Statement sets out our overall conclusion, that we do not believe regulation is preventing the social investment market from developing. It can, on the contrary, ensure the development of strong practices which in turn lead to investor confidence.

Next steps

We want to see the market for social investment develop in a way that provides appropriate protection for consumers and is sympathetic to the philanthropic motives shared by people who actively choose to invest in a business because it has a social purpose.

We believe robust regulation is an important pre-condition to establishing social investment as a viable and mainstream option alongside more traditional forms of investment. However, regulation on its own cannot turn a growing market into a mainstream one overnight. We encourage interested parties to work together to meet the challenges of this growing market.

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