The City regulator is cracking down on unregulated share offers after entrepreneurs turned to online services and social media to seek funds from investors.
The Financial Conduct Authority has warned unregulated firms that they cannot help to arrange investment deals for private companies without regulatory permissions.
Sharing information about a fundraising opportunity privately with a personal contact is not considered to be covered by regulation, but promoting an offer to the public is, as is “arranging deals in investments”.
Odin, a service that helps private companies to “pool investments”, said it had been informed by the regulator to pause taking on new customers until it changes its operating model. It said the “FCA has come to the view that deal syndication on a software platform