The rules outlined by a Financial Conduct Authority policy document regarding crowdfunding platforms have come into force with the new financial year.

The FCA’s regulations are intended to make sure these services are transparent and that sufficient safeguards are installed to prevent any wrongdoing.

One of the new regulations is that of a “10% rule”. This is simply to stop people investing no more than 10% of their net investable assets, excluding their home, pensions and life insurance. This will not apply to those who are deemed sophisticated investors and will also not be applicable to peer-to-peer lending.

The new rules will also attempt to protect those getting involved in loan-based crowdfunding. Investor’s money will have to be ringfenced to ensure it is not lost, while a third party must be available to take over in case a platform goes bankrupt.

Not everyone is happy with the new regulations though.

Christian Faes, the co-founder of the peer-to-peer lending platform Lendinvest, said: “We fear it will not protect the public from loan defaults in the peer-to-peer sector, which is crucial for long-term sustainability of the peer-to-peer lending industry.”

There are also concerns that smaller investors, who can be an integral part of a successful campaign, will have difficulty in getting involved. Criticism has come from supporters of equity-based crowdfunders. Stephen Hazell-Smith, co-founder of the Aim and Plus equity markets said: “Our regulator has taken the crowd out of crowdfunding by putting in place rules on just who may be permitted to be an investor.”