|Date||Version||Summary of changes from last version|
|01/10/19||v1.4(L)||Document updated and webpage implemented|
|19/12/19||v1.5(L)||Revised ICO reference number updated.|
JustUs is an electronic system accessible from the website with the URL http://www.justus.co (“Website”) which system facilitates lending between lenders and borrowers (“Platform”). The Platform is owned and operated by eMoneyHub Limited. eMoneyHub Ltd is Authorised and regulated by The Financial Conduct Authority. eMoneyHub Limited is registered in England and Wales 28b London Road, Alderley Edge, Cheshire SK9 7DZ . Company Number 08158588.
eMoneyHub Ltd is registered with the Information Commissioner number ZA589341. The Platform has been created to allow persons who wish to lend to be matched with persons who wish to borrow. The platform determines the financial standing of the borrowers and provides a risk grade for each eligible borrower. We do not provide loans ourselves, but we do provide Borrowers and Lenders with a facility, through the Platform for the placing of loans with each other (“Services”).
Under guidance from the FCA, we accept the importance of regulated firms considering the contents of a wind down plan as best practice. Wind down planning is described as a process in which the firm's governing body:
As a peer to peer platform we are advanced in considering much of a wind down plan as the regulatory requirement to conduct the activities of an "Operating an electronic system in relation to lending" mandate that we have:
Using the FCA guidance, we have designed this plan to set out the governance arrangements, operation procedures, estimated costs and resource requirements for an orderly wind down of the business to a point where it ceases its regulated activities and achieves cancellation of its permission with minimal adverse impact on its clients or counterparties.
It is reviewed once a year in line with the compliance monitoring programme calendar of events.
A copy of this plan can be downloaded here.
The Board of eMoneyHub Ltd has ultimate responsibility for the firm and its stakeholders. As such it will determine when the wind down plan will be invoked.
Clearly for any business the wind down plan is an action of last resort, but it is recognised that if the board considers that the business is not a going concern then the implementation of the wind down plan must be considered.
On invocation, the Board will delegate the operation management of the wind down plan to the wind down plan lead. Should the plan lead be incapacitated from taking this role then documented, alternative control and command measures will take effect.
As parent company of the group, should the wind down plan be invoked by the Board then all subsidiary companies will form part of the plan. Separate workgroups for each subsidiary may be set up to report back to the board and the wind down plan leader.
On conclusion of the wind down plan the Board, via the wind down plan leader, will formally notify the permission granting authority of its cessation of activity and request withdrawal of permissions.
Timeline planningOn invocation of the plan a realistic project management timeline will be presented to the board by the wind down leader. This timeline will include, communications, finance handover, staffing plan, "living will" provider hand over, and regulator liaison.
Communication PlanNotification of the wind down and next steps to be distributed to all stakeholders:
Finance HandoverThis is detailed in the CASS resolution pack and may happen within 48 hours of invocation.
Staffing planThe core staff identified to execute the wind down plan are:
CEO with admin support. As the staff base grows there is a potential for HR support (managing redundancies) but this will be reviewed as the firm grows.
"Living Will provider"The "living will provider", is on a retained contract to supply services to run off the loan book on a 'trigger event'. Invocation of the wind down plan would be deemed a trigger event and full details can be found in the Resolution agreement. (The resolution plan states that the living will provider will provide the service "under our own their regulatory permissions or of those under an outsourced arrangement." Presently it is the intention to temporarily outsource to a documented third party until rhe living will provider has secured the required permissions which it has previously held (namely debt administration and debt collection). Should this variation of permission not be forthcoming then the outsourcing contract with the documented third party would run until the entire book has run off.
The living will provider does not hold HMRC ISA Manager Status so an agreement has been confirmed with a further third party compliance solution provider to provide IF-ISA manager services within 2 weeks of a 'trigger event' through a one off set up fee and a fixed monthly service fee.
In order to prolong the estimation of time it would take the FCA to remove the Part 4a permissions, we assume a minimum adequate requirement for resourcing. Additionally, new business would cease so that part of the operation, and its associated costs, would stop immediately. The loan book business model works on a monthly gross margin basis, therefore the costs of the orderly wind-down of the loan book, by the firm or "living will provider" are covered by the gross margin. Regardless of the 'shape' and size of the loan book at invocation of the wind-down plan and taking into consideration the shrinking book volume as loans mature, gross margin is earned on all risk grades from the loan book. In other words, there is an ongoing revenue stream which covers the expenditure of running down the loan book.
Additionally, any late payments and arrears handling administrative costs are covered by the fee schedule charged to borrowers in this position.
The two main resource requirements for wind down are people and systems.
Systems are fully owned and therefore do not have ongoing licensing costs falling due. They are deemed an asset that crosses both financial and non-financial resources.
Being a start up technology led finance firm, it is used to operating with limited resources and operated for 2 years with a governing board and 2 members of staff.
The key individual and significant shareholder is the CEO. It is inherently in their own interests to stay to wind down the business so additional financial resource would not be required for their retention. Administration resource can be adequately met by 1 FTE.
The cash requirement to maintain this minimum adequate resource is modelled and documented.
This plan is part of the compliance monitoring programme and is entered into the calendar of activities. It will be reviewed on its anniversary and re-approval sought at board level.