Law change to allow peer-to-peer lending

The Government has confirmed that online peer-to-peer will be made possible in New Zealand as part of the long-awaited overhaul of securities laws. A recently released Cabinet paper says:

Peer-to-peer lenders are effectively precluded from operating in New Zealand given the regulatory regime. Licensing is intended to introduce a regulatory regime proportionate to the risks that they pose. The licensing criteria will look at the character and background of the key individuals involved, and also a limited assessment of organisational processes.

This is welcome news for what could be a niche fledgling market in New Zealand. However, as tends to be the nature with securities law, the devil may lie in the yet-to-be-determined detail.