The Collateral Companies – which include Collateral (UK) Ltd, Collateral Sales Ltd and Collateral Security Trustee Ltd – had been placed into administration by its directors on 28^th February 2018.

The companies operated a P2P lending platform through the website collateraluk.com, and Collateral UK Ltd claimed to hold an interim permission from the FCA to carry out regulated activities.

However, the regulator revealed that none of the Collateral Companies held any valid authorisation or permission to carry out regulated activities.

After it was challenged by the regulator, the Collateral Companies agreed to cease its lending activities on 26^th February 2018.

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The companies were required to obtain the approval of the FCA when appointing an administrator.

The FCA said that this was to protect investors by ensuring an independent person conducted the administration in the best interests of the investors.

However, this did not happen and the FCA has intervened to ensure investors are protected.

“The FCA will continue to work in the best interests of investors in the Collateral Companies,” said the regulator.

On 16^th March 2018, the High Court adjourned the FCA’s applications to 27^th April 2018.

Until then, the court has ordered that – barring incoming payment of loan interest and repayments and certain other administrative steps – the substantive progress of the administration should be paused.