michaelc
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Post by michaelc on Jul 6, 2018 15:30:59 GMT
Two parts to this:
1/ The website says it is a trading name of Social Money Ltd but that company is not fully authorised. I think there might be a minor error in that the website should state "Social Money Limited" since that is the one with all the permission.
2/ Reviewing the FCA register again I see that the first item under Permission says this : "This firm cannot hold client money. It may be able to control client money if it has the necessary requirements." Perhaps my question should be better directed to the FCA (who I have to say I'm rapidly losing patience with) but how is that clear to a consumer investor? Are they considered by the FCA to be a fit and proper company to hold my money in a client account and is that client account properly segregated account at the bank?
3/ Finally, (ok sorry, three parts), I know that Louis kindly provided some detail a few months ago but I think he said that whilst they do have all the required permission they aren't needed because bridge lending isn't regulated. Surely holding consumer investors cash is regulated though? Or is the deal that by using the website you agree to be either a HNW or sophisticated investor and therefore the company doesn't need those permissions?
I'm asking these questions because I have so far had a good experience with them and would like to increase my holdings hence doing a bit more DD.
Any opinions welcome whether from other investors or the company.
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mason
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Post by mason on Jul 6, 2018 20:03:16 GMT
I have no interest in this platform, but am just visiting after it was mentioned to me elsewhere on the forum. In addition to the above, the website states: "BridgeCrowd is a trading name of Social Money Ltd"However, according to the FCA register, Social Money Limited uses the trading names "Bridging Crowd" and "The Bridging Crown" (sic), but not "BridgeCrowd". Furthermore, in addition to lacking permission to hold client money (perhaps because another firm takes care of this on behalf of Social Money Limited?), of greater concern, the firm seems to lack the permission "Operating an electronic system in relation to lending" Investors and potential investors ought to satisfy themselves that these inconsistencies have a satisfactory explanation before they decide to invest, especially in light of recent events involving another platform. Edit: More information about this here: p2pindependentforum.com/thread/12110/fca-approvals-client-money-permission
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Monetus
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Post by Monetus on Jul 6, 2018 20:11:33 GMT
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Monetus
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Post by Monetus on Jul 9, 2018 13:27:39 GMT
bridgecrowd doesn't read this forum that often so someone may need to contact him directly and point him in the direction of this thread for a response. In regards to 3, I'd definitely suggest that with a £5k minimum per loan, BridgeCrowd investors are assumed to be 'sophisticated' and/or "high net worth" which potentially relaxes some of the rules in regards to FCA regulation (see LendInvest).
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ilmoro
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Post by ilmoro on Jul 9, 2018 15:52:51 GMT
Pretty sure you can't assume an investor is sophisticated, self certified or HNW they are required to make a declaration to that effect.
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michaelc
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Post by michaelc on Jul 9, 2018 16:35:19 GMT
Pretty sure you can't assume an investor is sophisticated, self certified or HNW they are required to make a declaration to that effect. I think we did when we signed up. The the question becomes what rights do we give up by stating that? Does it mean we can't invest and be sure are money is properly segregated and looked after by someone fit and proper?
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ilmoro
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Post by ilmoro on Jul 9, 2018 17:06:55 GMT
Pretty sure you can't assume an investor is sophisticated, self certified or HNW they are required to make a declaration to that effect. I think we did when we signed up. The the question becomes what rights do we give up by stating that? Does it mean we can't invest and be sure are money is properly segregated and looked after by someone fit and proper? No, it means you can be offered certain investment products whose promotion is only permitted to defined & declared investor types, some of which may be unregulated but the company offering them still requires any relevant permissions & must abide by client money rules. Permission to control client money is actually a more significant permission than hold AIUI as it allows the firm to get clients permission to take direct debits, hold CC details.
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michaelc
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Post by michaelc on Jul 9, 2018 17:35:23 GMT
I think we did when we signed up. The the question becomes what rights do we give up by stating that? Does it mean we can't invest and be sure are money is properly segregated and looked after by someone fit and proper? No, it means you can be offered certain investment products whose promotion is only permitted to defined & declared investor types, some of which may be unregulated but the company offering them still requires any relevant permissions & must abide by client money rules. Permission to control client money is actually a more significant permission than hold AIUI as it allows the firm to get clients permission to take direct debits, hold CC details. Ahh so you think permission to control implies permission to hold? Still not happy (with FCA mostly) that something as fundamental as this is not crystal clear.
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ilmoro
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Post by ilmoro on Jul 9, 2018 18:30:00 GMT
No, it means you can be offered certain investment products whose promotion is only permitted to defined & declared investor types, some of which may be unregulated but the company offering them still requires any relevant permissions & must abide by client money rules. Permission to control client money is actually a more significant permission than hold AIUI as it allows the firm to get clients permission to take direct debits, hold CC details. Ahh so you think permission to control implies permission to hold? Still not happy (with FCA mostly) that something as fundamental as this is not crystal clear. Quite difficult to find any clear definitions of hold client money & control client money permissions. The one reference I found (which is old) implies that control has additional criteria to hold. However, the wording on BC permissions is such that I have no idea if it has any CM permissions as it makes reference to being related to requirements and that permission says none. Edit BC say they have control CM even though they dont need it.
The standard form of CM permission is 'This firm must protect the money it holds and/or controls on behalf of customers' which is equally vague as it could mean a firm can hold or control or both but it at least it is clear there is some form of permission.
Personally BC permissions or lack of confuses me, the lack of P2P permission when carrying out P2P lending makes no sense, so I wont invest, and certainly not at £5k a pop, but I know others take a different view and have a good opinion of the platform.
You are right, while legal language is required in regulation, it should also be explained in laymans terms somewhere
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michaelc
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Post by michaelc on Jul 9, 2018 20:56:12 GMT
I asked Louis to comment on the last thread about FCA issues and to be fair he did and at some length. I think it might add weight if someone else was to ask him this time.
I certainly hope he can clear up these name anomalies.
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ding
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Post by ding on Jul 9, 2018 22:31:44 GMT
Registering a company at companies house limited and ltd are interchangeable. So you can't register dipshit ltd if dipshit limited exists. So I suspect this is non issue (though sloppy). Still worth giving them a nudge to let them know we are awake.
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michaelc
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Post by michaelc on Aug 2, 2018 20:25:22 GMT
Louis has confirmed he will be updating the website to reflect the correct "ltd" vs "limited" wording but has also pointed out the two are apparently interchangeable - that was news to me. More concerning is that he can't access this forum anymore. I think he needs to give his IP or range of IPs in his office to GSV3MIaC so that this can be checked but at the moment he is saying he has no access.
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Monetus
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Post by Monetus on Aug 2, 2018 20:34:38 GMT
Funnily enough I actually sent an email to Louis earlier today to bring his attention to this and several other threads on the forum.
Hope that he manages to resolve this successfully so that he can provide some responses!
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Post by GSV3MIaC on Aug 3, 2018 7:56:00 GMT
Louis has confirmed he will be updating the website to reflect the correct "ltd" vs "limited" wording but has also pointed out the two are apparently interchangeable - that was news to me. More concerning is that he can't access this forum anymore. I think he needs to give his IP or range of IPs in his office to GSV3MIaC so that this can be checked but at the moment he is saying he has no access. star dust identified the IP address as being caught up in a block of apparent VPNs used by bad folks, (and thus blocked) but they have now opened a hole for Bridgecrowd rep to get through, so hopefully it is fixed.
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Post by thebridgecrowd on Nov 12, 2018 8:55:05 GMT
Firstly thank you for your patience. For some reason my log in and or IP was banned from the site and I could not log or find anyway of getting this removed. Thankfully sone kind investors rallied round to get it unbarred.
michaelc Turning to a few of the points in this thread. 1/ The website says it is a trading name of Social Money Ltd but that company is not fully authorised. I think there might be a minor error in that the website should state "Social Money Limited" since that is the one with all the permission.
The website states Social Money Limited on the home page. Please can you direct me to the where it states Social Money Ltd so that I can change it. 2/ Reviewing the FCA register again I see that the first item under Permission says this : "This firm cannot hold client money. It may be able to control client money if it has the necessary requirements." Perhaps my question should be better directed to the FCA (who I have to say I'm rapidly losing patience with) but how is that clear to a consumer investor? Are they considered by the FCA to be a fit and proper company to hold my money in a client account and is that client account properly segregated account at the bank? Lenders money is held in a Lloyds Bank segregated client trust account that is recognised client trust account and all money in that account is automatically segregated from the any money (and assets and liabilities) of the BridgeCrowd / Social Money.
3/ Finally, (ok sorry, three parts), I know that Louis kindly provided some detail a few months ago but I think he said that whilst they do have all the required permission they aren't needed because bridge lending isn't regulated. I believe I have commented on this at length in previous link. p2pindependentforum.com/thread/12110/fca-approvals-client-money-permission. In short, any company can hold client money, that is the individual agreement between the clients / lenders / investors and that of the company. A company does not need to have to an FCA permission to hold client money (full stop). If the company is providing FCA regulated activities then it may or may not require a permission to hold client money from the FCA depending on the nature of the business. The loans that you are entering into are unregulated bridging loans, hence we do not need to this permission from FCA. That aside, all lenders / investors money that is held as cash is held in a segregated client trust account.
Surely holding consumer investors cash is regulated though? No as stated Or is the deal that by using the website you agree to be either a HNW or sophisticated investor and therefore the company doesn't need those permissions? Being an HNW or Sophisticated investor is irrelevant. Although most of our investors are HNW and or sophisticated, being a HNW or
I'm asking these questions because I have so far had a good experience with them and would like to increase my holdings hence doing a bit more DD. Thank you, we appreciate your support. @masoncHowever, according to the FCA register, Social Money Limited uses the trading names "Bridging Crowd" and "The Bridging Crown" (sic), but not "BridgeCrowd". Furthermore, in addition to lacking permission to hold client money (perhaps because another firm takes care of this on behalf of Social Money Limited?), of greater concern, the firm seems to lack the permission "Operating an electronic system in relation to lending" Please see my response here as to why this permission is not required for our modus operandi. p2pindependentforum.com/thread/12110/fca-approvals-client-money-permission@moneuts You are correct, we believe that over 95% of our investors are sophisticated or HNW, judging by the profession, income and available funds. ilmoro Pretty sure you can't assume an investor is sophisticated, self certified or HNW they are required to make a declaration to that effect. - Correct. Permission to control client money is actually a more significant permission than hold AIUI as it allows the firm to get clients permission to take direct debits, hold CC details. - Correct - (many of which we do not do and furthermore and one of the reasons why many firms do not need the permission for their MO)Registering a company at companies house limited and ltd are interchangeable. So you can't register dipshit ltd if dipshit limited exists. So I suspect this is non issue (though sloppy). Correct Still worth giving them a nudge to let them know we are awake. We are awake ... we just couldn't see or hear what was being said as for some reason our IP was banned by the "independent" forum. As an FYI we are applying for a 36.H permission of operating an electronic P2P platform. This is primarily
(1) so that we can offer our loans in a ISA wrapper and
(2) so that we can offer some more loan products (regulated mortgage contracts, regulated second charge loans, regulated consumer credit loans that we are already in the business of making (its just that we do not allow investors via the BridgeCrowd site to enter them at present) and
(3) Even though we do not need a.36(h) permission to continue our current MO of unregulated bridging loans, we also acknowledge that obtaining this permission would further our current investors confidence as it is evident that some investors (though far from all) would like it.
But may I make a point here. The underlying success of your loans is down to two things (1) the skill and expertise of the company and the management team. Hopefully we have proven to our current investors that we are more than competent in this regard with a 100% track record on every loan and (2) the dignity and honour of the company and management team. If there are rouges out there that wish to co-mingle (“steal”) investors assets and combine it as their own, then this is something which any investor may find hard to avoid. I believe their is one notable platform that appears to have attempted to do this.
As an aside, in the wake of the Collateral episode, I have asked an independent insolvency company to review our loan agreements and state how they would manage a proposed BridgeCrowd insolvency. They unequivocally stated that they would be bound by the contracts and bound by insolvency law to treat all the cash in the client account and all the loans owned by investors as the equity of the individual investors and those assets (cash or loans) would not be co-mingled with the assets or liabilities of the BridgeCrowd.
If anybody with like further information please email me on louis@thebridgecrowd.com
Our FCA compliance advisers are www.scottrobert.co.uk Our FCA compliance lawyer is Daniel Tunkel of Howard Kennedy
Finally sorry for the delay in responding. Responses take time. In order for me to write a comprehensive reply, I must first speak with our compliance firm and then our solicitors firm, then we draft responses of which they both review before signing them off and then we post them. All of this takes time (and cost), hence why we can not just jump on every post.
Warm regards
Louis Alexander MD BridgeCrowd
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