luton
New Member
Posts: 2
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Post by luton on May 11, 2014 12:26:27 GMT
Hi .. I have been following some of the exchanges about the Wellesley business model and the responses from W really do provide the right answers in my view. I am preparing to invest. However, I also need to be very careful to be sure that the capital is as safe as it can be in the P2x context.
1) I have looked up "655503" on the FCA website with no result. What protection does "interim permission" provide and what is the view/outlook about full permission?
2) I really appreciate W's comments that having one's own money at risk (and subordinated!) "focuses the mind"! I was wondering if there is any independent verification / validation to these statements that can be provided to underpin the investment of sums that are meaningful and important to me. My view is that I really like the business proposition, the business structure and the style of operation. I would verty much like some independent validation that the seemingly very careful safeguards are actually in place in this early stage business development.
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james
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Post by james on May 11, 2014 15:16:41 GMT
There's a register specifically for firms with interim permission and you need to search that until they are fully authorised. Wellesley & Co is registered with interim permission. There is one massive change. Previously the OFT protected borrowers but not lenders. The FCA protects both and firms have to get used to that change. For some types of P2x investing in businesses - like crowdfunding - there are also major changes in requirements for investors; less so for the lending-based usually discussed here. Previously, the Advertising Standards Authority was the sole practical regulator of this for P2x firm marketing. Now, the firms need to deal with the FCA's similar requirements, but knowing that the FCA is considerably more powerful when it comes to enforcing its rulings.
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Post by batchoy on May 11, 2014 20:01:29 GMT
There's a register specifically for firms with interim permission and you need to search that until they are fully authorised. Wellesley & Co is registered with interim permission. There is one massive change. Previously the OFT protected borrowers but not lenders. The FCA protects both and firms have to get used to that change. For some types of P2x investing in businesses - like crowdfunding - there are also major changes in requirements for investors; less so for the lending-based usually discussed here. Previously, the Advertising Standards Authority was the sole practical regulator of this for P2x firm marketing. Now, the firms need to deal with the FCA's similar requirements, but knowing that the FCA is considerably more powerful when it comes to enforcing its rulings. I would act contest the point that the FCA protects anyone when it come to crowdfunding. What the FCA is/will be doing is regulating the industry however regulation does not necessarily equal protection.
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jimbo
Posts: 234
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Post by jimbo on May 12, 2014 0:24:42 GMT
Agreed. For example the FCA regulates the UK financial markets, but there is plenty of anecdotal evidence out there that they don't make a particularly great job of it when it comes to the AIM market. The following site provides some insight into this issue in some of the articles posted: www.shareprophets.advfn.comIt's free to sign up, but the site won't be everybody's cup of tea...
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james
Posts: 2,205
Likes: 955
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Post by james on May 12, 2014 1:10:32 GMT
I would act contest the point that the FCA protects anyone when it come to crowdfunding. What the FCA is/will be doing is regulating the industry however regulation does not necessarily equal protection. True that they don't have to be the same but protection is one of the objectives and for the lending-based part of what the FCA calls crowdfunding they are to enforce the Consumer Credit Act. Though by crowdfunding I meant the investing in companies version rather than using crowdfunding to refer to both as the FCA does. One of the changes that does apply from 1 April 2014 (page 12) for loan-based setups is the fair, clear and not misleading communications rule, which is perhaps why P2x firms are adjusting their activities in that area now. Hard to see how that requirement, with full FCA powers to enforce it, can fail to be protective if enforced. Similarly, investors have a right to take a complaint to the FOS if they are not satisfied with the way it is resolved. That surely beats relying solely on a firm's own internal complaints process if the firm and investor are disagreeing. The definition of an eligible complaint is pretty broad: " any oral or written expression of dissatisfaction, whether justified or not, from, or on behalf of, a person about the provision of, or failure to provide, a financial service or a redress determination, which alleges that the complainant has suffered (or may suffer) financial loss, material distress or material inconvenience." (page 32) Of course, no protection is perfect and we can't expect that from the FCA either, but it does beat what was there before.
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Post by wellesleyco on May 12, 2014 15:46:48 GMT
2) I really appreciate W's comments that having one's own money at risk (and subordinated!) "focuses the mind"! I was wondering if there is any independent verification / validation to these statements that can be provided to underpin the investment of sums that are meaningful and important to me. My view is that I really like the business proposition, the business structure and the style of operation. I would very much like some independent validation that the seemingly very careful safeguards are actually in place in this early stage business development. Thank you very much for your questions. As disclosed above by james we are on the list of firms with Interim Permissions. The information on that page is outdated as we have moved address which the FCA has been notified about yet has not amended that page. With regards to Independent Verification that we do participate in every loan, our 'Year End' happens in June and we shall ask our auditors to write a letter to verify their findings in answers to this request. We believe this is the best way to proceed.
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luton
New Member
Posts: 2
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Post by luton on May 12, 2014 17:00:04 GMT
Thank you very much for your response. I was wondering if you have a form of words of, and a timeframe by which, a letter from your auditors may be made available? I hazard a suggestion that this independent assurance would be a strong and useful tool in raising funds - certainly it is of interest to me to be convinced that your minds will be focused in this way! Perhaps this could be done as part of the preliminary work in preparation for the year end audit and the risk analysis?
Also, I noticed on another P2x website that an international firm of accountants were the security trustees - could you please advise who W have appointed as security trustee. Many thanks.
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Post by wellesleyco on May 13, 2014 7:45:14 GMT
luton, We do not have a form of words or timeframe that this may be made available. I have noted your request for this as a part of our year end report or earlier if possible (I am yet to receive a response to this request). We are authorised by the FCA and feel that in the meantime, our acceptance to be authorised would not have been granted, had we been mis-selling a product (i.e not involving our own money). We see that the authorisation of the FCA is an independent assurance that we operate in the manor that we say we do. The Directors of Wellesley & Co have operated under the regulator for many years and understand the importance of best practise within the industry. Currently the Directors of Wellesley & Co have taken over Lakehouse Security Trustee in a personal capacity until a replacement is found. As mentioned before this is a very specialist role and is of paramount importance owing to the responsibility for lender’s capital. The role requires an exceptional knowledge of the laws applicable and understanding of Wellesley & Co. Naturally we are unlikely to rush the process of hiring a replacement. I hope that this acts to reassure you.
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