1.UK – AltFi
The UK financial regulator the Financial Conduct Authority (FCA) will face an independent inquiry into its oversight of the failed mini-bond firm London Capital & Finance, according to AltFi.
“In a meeting late last week, the FCA says its board agreed with govermentall calls that there should be an investigation “by an independent person” into the failure of London Capital & Finance, which collapsed leaving retail investors out of pocket to the tune of £230m.
The investigation will cover questions in two areas. The FCA’s supervision of LC&F and whether the existing regulatory system adequately protects retail purchasers of mini-bonds.
“The Board decided that the FCA should ask the Treasury to use its formal powers to direct the FCA to commission this review, as this will ensure that the review has a broad and comprehensive remit,” The FCA said.
Mini-bonds are unlisted, unregulated debt securities. They are non-transferable and illiquid and at least 11,600 mini-bond holders who were attracted by LCF’s punchy 9 per cent yields and supposed ISA eligibility. Marketed as a “fixed-rate ISA”, the mini-bonds it later transpired could not be wrapped in an ISA. They are now facing collective losses of £236m as administrators scramble to recover assets. Less than a fifth is expected to be recovered.”
2. UK – IFISAs/AltFi
“THE FINANCIAL Conduct Authority said it has seen evidence that Innovative Finance ISAs (IFISA) are being promoted alongside cash ISAs and has urged consumers to “carefully consider where their money is being invested” before purchasing the “high risk” product.
“Investments held in IFISAs are high-risk with the money ultimately being invested in products like mini-bonds or P2P investments,” the City watchdog said on Monday.
“These types of investments may not be protected by the Financial Service Compensation Scheme so customers may lose the money invested or find it hard to get back.
“Anyone considering investing in an IFISA should carefully consider where their money is being invested before purchasing an IFISA.”
3. US – Equity
Alley Watch carries news of the 10 biggest equity rounds in New York in March.
4. US – AltFi
Business Leader looks at Security Token Offerings (STOs) as a source of SME funding.
“Over the past ten years, the landscape for growth finance has changed dramatically as new funding options for promising start-ups have developed, in turn opening up new opportunities for adventurous investors.
The development of equity crowdfunding has introduced businesses and entrepreneurs to a new pool of investors. Those investors can now think about putting money in start-ups and SMEs that were previously the preserve of angel investors and venture capital funds. Major crowdfunding sites such as Seedrs and Crowdcube have helped to pioneer equity crowdfunding, raising hundreds of millions of pounds for hundreds of innovative companies.
However, the very recent launch of so-called Security Token Offerings (STOs) is set to disrupt the world of growth finance once more, promising more opportunities for investors and benefits for growth companies. How so?
Tokenisation entails issuing digital tokens that represent underlying assets on a blockchain. Those assets can include regulated securities such as shares but also bonds, commodities, and other physical assets such as property. Security Token Offerings (STOs) enable businesses to raise money via equity crowdfunding or private placement through the tokenisation of their shares.”
5. International – FinTech
“David Treat, the global lead and managing director of Blockchain at Accenture, has joined the board of crypto policy group the Global Blockchain Business Council (GBBC).
At Accenture Treat has driven the group’s Blockchain consultancy business into a global force, while he also sits on the boards of the Linux Foundation’s Hyperledger project, the Enterprise Ethereum Alliance, and the ID2020 Alliance.
The Swiss-based GBBC was founded in 2017 on the back of a meeting at Sir Richard Branson’s Necker Island, today its membership spans organizations and individuals from over 40 countries.”