This paper presents a framework for a bespoke regulatory regime for community and social finance.

Key findings:

• There is a serious need for law and regulation to recognise the special characteristics of social and community finance investment offerings and activity.
• The cost of compliance with mainstream financial services regulation is often prohibitive and prevents or seriously delays necessary and important social finance activity from taking place.
• The recommendations the report makes to Government include three steps towards creating a co-regulatory regime that would fit within the existing financial services legislative framework and would not require significant Government expenditure. 

To date, there has been no attempt on the part of government to create a tailor-made regime for community and social finance activity.

This position paper sets out how a proportionate social finance legal and regulatory regime could be established, to enable the Government to achieve its policy objectives of growing the social investment market and making the Big Society Bank a success.

Authors:

Luke Fletcher, Bates, Wells and Braithwaite