Knowledge Bank

Here we consider the role of a Security Trustee in relation to a group of investors holding secured debt securities (Bonds, Loan Notes).Many secured debt securities require a corporate entity or person to act as the Security Trustee. The company (“Borrower”, “Issuer”) issuing the securities (Bonds, Loan Notes) receives money from lenders (“investors”) under the terms of the instrument. The instrument may include a charge over property, a debenture over the assets and undertaking of a company, a bank account or a combination of other types of security in lieu of the Borrower fulfilling its obligations under the instrument. The...

Here we explore this relatively new – but increasingly popular – means of financing and explore the compliance considerations you need to bear in mind. What is self-funding? You will be familiar with crowd-funding, the concept of leveraging a crowd to finance an investment opportunity. Self-funding is the next evolution of this; the idea of using your own customer base and your digital assets (online channels) to finance your growth and do so independently to that of a third party platform. What are the benefits of self-funding? The benefits of this approach to raising capital can be numerous – for both issuer and investors. For the...

The UK’s FCA, like much of the rest of the world, is seeking to enable an ecosystem that provides positive economic benefits without excessive risks of fraud. Most regulators have determined ICOs are securities and thus must abide by local and international disclosure requirements. In the UK, if an ICO is considered an investment (IE purchasers expect a return on their purchase), it is regulated and not following the rules of disclosure and promotion is a criminal offense. So, what does this mean? ICO issuers (and firms acting for the issuer) will need to consider if promotional materials issued in relation to an...

The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are government- backed schemes offering great tax efficient benefits to investors in return for investment in qualifying start-up companies seeking early stage equity investment. . EIS Benefits to Companies Under EIS qualifying companies can raise up to £5 million each year, with a maximum investment of £12 million in the company’s lifetime (this includes amounts received from other venture capital schemes). There are a number of criteria the company must meet in order to issue shares under the scheme, in addition to what the money raised can be used for and the type...