The regulatory body is trying to determine whether there are any barriers to social investments where the aim is to provide a wider social benefit and isn’t purely financially motivated.
Unlike donors, who do not get their money back; social investors generally expect to get back their initial investment or expect the organisation to use the investment and provide a return where it can.
The purpose of the consultation is for the FCA to clarify how and when the rules apply to social enterprises and retail investors.
Christopher Woolard, director of strategy and competition, FCA, said: “The social investment market is developing quickly and regulation needs to keep pace. We want to explore the impact of our regulation to ensure it isn’t inappropriately restricting growth but continues to protect investors.”
The consultation period will close on 14 March 2016.
