Sara Johns, Partner

Alexander Curry, Senior Associate

5 November 2015

STEP JERSEY 23rd Annual International Conference

Fintech and Crowdfunding

• Fintech

• Speed of change

• Why do we care?

• Jersey

• Crowdfunding

Introduction

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• Finance meets software

• Disrupting traditional business models

• Retail

Fintech

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• 2008 – global investment in Fintech: c$930 million

• 2013 – grown steadily to $4 billion

• 2014 – tripled to over $12 billion

• Europe – increase by 215% to $1.48 billion in 2014

- London $539 million

- Amsterdam $306 million

- Stockholm $266 million

• 40% of London workforce is financial and technology services

Fintech – pace of change

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Why do we care?

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Some of the established companies have been around for 300 years. We’ve been here for three. They can own the next five years. We’ll own the 25 years after that Nick Hungerford, Nutmeg

• Changing the wealth management landscape

• 40,000 users in 3 years

• “Get an Intelligent, Fully-Managed Investment Portfolio, all for the cost of doing it yourself”

• How it works

- online questionnaire

- segmentation by risk appetite

- monitor and rebalance portfolios

- single all-inclusive fee

• Customer base

• Economics overcoming relationships

Nutmeg

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• Fintech – the great leveller

• Fintech helps itself

• Fintech in Jersey

- an option or an imperative?

- Digital hub – a big vision

- It all begins at home

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The Future

• Crowdfunding: “whereby individuals and organisations offer equity investment or cash loans to

businesses via online platforms”

• Loan-based (debt) platforms (interest and capital return)

• Investment (equity)-based platforms (non-readily realisable securities)

Crowdfunding: a (relatively) new world

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• Regulation phased in and continually reviewed

• Consumer/Investor protection driving legislative developments in the UK

• Financial Conduct Authority – authorising firms in the UK to conduct regulated activity

• Consumer protections:

• High Net Worth Individuals/Self-Certified Sophisticated Investors

• Net asset tests (10% threshold) (equity investment)

• Minimum capital standards for companies seeking investment (debt investment)

• Regulation adding legitimacy?

Regulation: thinning the “crowd”?

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• No Jersey specific “crowdfunding” legislation - but not a blank canvas

• Consider on a case by case basis – equity or debt?

• Exemptions?

• Jersey Financial Services Commission – Sound Business Practice Policy

• Demand as a catalyst for change?

• Sunrise regulation

Jersey’s legislative position

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• Jersey based companies struggle to gain traction with UK Crowdfunding Platforms

• Certainly possible to set up an online platform in Jersey. Liaise with JFSC. Legal and Regulatory advice. Promoting into the UK? Consider Financial Conduct Authority rules and regulations and English law requirements.

• More consultation within Jersey Finance to develop thinking

• Increasing the debate amongst local business leaders

• Developing industry expertise

• Protecting consumers in key

• Reputational risk for Jersey

• Digital Jersey?

An opportunity for Jersey?

STEP Jersey

This document is for general information only and does not seek to give legal advice or to be an exhaustive

statement of the law. Specific advice should always be sought for individual cases. This reflects the law as at the

date of publication.

© Ogier 2015. All rights reserved.

Ogier: Legals

STEP Jersey

Sara Johns - Partner

sara.johns@ogier.com

+44 (0) 1534 514205

Alexander Curry – Senior Associate

alexander.curry@ogier.com

+44 (0) 1534 514032