The FCA has halted ISA business at crowd-funding platform Nextcrowd over concerns about potential “serious regulatory breaches.”

The regulator said the Herts-based firm could no longer act as an ISA manager although underlying investments could continue.

Nextcrowd is a debt and equity crowdfunding platform.

The firm’s client base is divided between retail investors, certified high net-worth individuals and self-certified sophisticated investors. As of 26 March, the Firm had 66 customers who had invested £1.7m in equity and debt offered on the platform.

The watchdog first imposed restrictions on Nextcrowd parent firm Business Agent Limited in July and has now followed that up with further restrictions preventing Nextcrowd from carrying out regulated business without express written permission from the FCA.

The FCA said it placed restrictions on Business Agent Limited over concerns about the firm’s failings related to its 'Nextcrowd' platform.

A review in July by the FCA exposed “significant regulatory breaches” at Nextcrowd.

Following a review of the firm’s representations, the FCA issued a Second Supervisory Notice on 10 September, detailing the findings and the restrictions imposed.

FCA’s key concerns about Business Agent Limited's operations included:

• Unauthorised handling of client money - the firm held and controlled client funds without the necessary permissions

• ISA regulation compliance issues - the firm received ISA subscriptions into accounts that were not properly set up under the ISA regulations

• Lack of systems and controls - the firm did not implement effective measures to manage potential conflicts of interest or conduct adequate due diligence on investments listed on its Nextcrowd platform

• Failure to disclose information - Business Agent Limited did not supply requested details about individuals connected to the firm

• Potential breach of financial promotion rules - the FCA said there may be compliance issues related to the approval of financial promotions

With the restrictions now in place, Business Agent Limited can no longer act as an ISA manager, the FCA said. Investors with ISAs managed by the firm are being urged to contact Business Agent Limited directly if they have concerns.

The restrictions relate to the Nextcrowd platform not the underlying investments. However, investors should contact the issuer of their investments to decide if there will be any impact, the FCA said.

The firm told the FCA it had not set out to intentionally mislead the regulator.