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Don’t invest unless you’re prepared to lose all the money you invest. This is a high risk investment and you are unlikely to be protected if something goes wrong. Take 2 minutes to learn more

COBS 4, Annex 1

 

Estimated reading time: 2 min

 

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

 

1. You could lose all the money you invest

• If the business you invest in fails, you are likely to lose 100% of the money you invested. Most start-up businesses fail.

2. You are unlikely to be protected if something goes wrong

• Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker here. [https://www.fscs.org.uk/check/investment-protection-checker/]

• Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated firm, FOS may be able to consider it. Learn more about FOS protection here. [https://www.financial-ombudsman.org.uk/consumers]

3. You won’t get your money back quickly

• Even if the business you invest in is successful, it may take several years to get your money back. You are unlikely to be able to sell your investment early.

• The most likely way to get your money back is if the business is bought by another business or lists its shares on an exchange such as the London Stock Exchange. These events are not common.

• If you are investing in a start-up business, you should not expect to get your money back through dividends. Start-up businesses rarely pay these.

4. Don’t put all your eggs in one basket

• Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well.

• A good rule of thumb is not to invest more than 10% of your money in high-risk investments. [https://www.fca.org.uk/investsmart/5-questions-ask-you-invest]

5. The value of your investment can be reduced

• The percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows. Most start-up businesses issue multiple rounds of shares.

• These new shares could have additional rights that your shares don’t have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment.

If you are interested in learning more about how to protect yourself, visit the FCA’s website here.

Regulatory Disclosures

Stewardship Code

Under Rule 2.2.3R of the FCA’s Conduct of Business Sourcebook, BCI Finance Ltd (“The Firm”) is required to include on this website a disclosure about the nature of its commitment to the UK Financial Reporting Council’s Stewardship Code (“the Code”) or, where it does not commit to the Code, its alternative investment strategy.

The Firm is part of a group that is focused on investing in and servicing of consumer receivables in the UK and Europe. It does not invest in individual equities, neither does it have representation on the companies with whom we partner.

Consequently, The Firm fully supports the objectives that underlie the code, although believes the provisions of the code are not relevant to the type of business or investment strategy currently undertaken by The Firm.

If The Firm’s investment strategy or business model changes in such a manner that the provisions of the Code become relevant, The Firm will amend this disclosure accordingly.

MIFIDPRU 8.6. DISCLOSURE BY A SNI MIFIDPRU INVESTMENT FIRM 

The Financial Conduct Authority (“FCA”) in its Prudential sourcebook for MiFID Investment Firms (“MIFIDPRU”) sets out the detailed prudential requirements that apply to BCI Finance Ltd (the “Firm” or “BCIF”).

Under MiFIDPRU 8 of FCA’s Handbook the Firm is classified as a SNI MiFIDPRU investment firm and is required to make a public disclosure of their remuneration policies and practices encouraging better transparency and accountability.

The Firm’s Remuneration Policy is established in accordance with the requirements of the MIFIDPRU Remuneration code to ensure that BCI Finance Limited complies with regulatory requirements while fostering a culture of responsible risk-taking and fairness in remuneration.

1. APPROACH TO REMUNERATION FOR ALL STAFF

The objective of the BCIF remuneration policy is to establish, implement and maintain a culture that is consistent with, and promotes, sound and effective risk management and does not encourage risk-taking which is inconsistent with the risk profile of BCIF and the services that it provides.

All staff at the Firm are eligible to receive fixed and variable remuneration, regardless of their role or level of seniority. The level of variable remuneration that each staff member receives is determined by their individual performance and the performance of the Firm as a whole.

Fixed remuneration, including base pay and benefits, constitutes a substantial portion of total compensation and is designed to provide employees with a competitive and stable income. It is based on market rates and the responsibilities of each role and is reviewed annually based on individual and company performance assessment metrics.

Variable remuneration, including annual bonuses and long-term incentives, is linked to personal and business targets and the successful implementation of strategy. It shall be deferred over an appropriate period to promote prudent risk-taking and responsible behaviour.

2. OBJECTIVES AND APPROACH TO FINANCIAL INCENTIVES

The Firm uses Annual Bonuses as the main financial incentive.

Annual bonuses incentivize performance and reward achievement in line with the agreed corporate strategy. Annual bonuses exist to reward contribution to the business during the year above the level expected for being in receipt of a salary. They should be clearly linked to business and personal targets, through the financial and strategic KPIs reported in the Strategic Report. Where other measures are chosen, these should be explained and justified.

The firm uses a comprehensive annual review process to assess individual performance. This process includes the following assessment inputs:

  • Skills Developed: Active participation in training and development programs;

  • BC Values: Demonstrating company values in daily work;

  • Skills Demonstrated: Alignment with the Career Development Framework for your track and level;

  • OKR Scores: Progress against Objectives and Key Results agreed with your line manager.

The results of the annual performance review process impact an individual’s remuneration in the following ways:

  • Performance-based Bonuses: High performance scores can lead to performance-based bonuses, rewarding employees for their exceptional contributions.

  • Salary Adjustments: The annual review process may result in salary adjustments based on an individual’s performance, skills development, and alignment with market rates.

  • Career Progression: Demonstrating growth and development in the required competencies can lead to promotions and career progression, which in turn influence remuneration.

While the company uses a comprehensive annual review process to assess individual performance which can lead to performance-based bonuses, the Members continue to expect that financial metrics will comprise the significant majority of the overall bonus.

3. DECISION-MAKING PROCEDURES AND GOVERNANCE

As an SNI firm, the BCIF does not require a Remuneration Committee. The entire Board is appropriately engaged in the remuneration setting process and acts as a Management Committee (the “Committee”).  The Committee is responsible for overseeing and approving the remuneration policy and ensuring that it remains in compliance with relevant regulations and industry standards.

The Committee exercises independent judgement and is not overly reliant on remuneration consultants. Their decisions are based on several factors, including the Firm’s financial performance, the performance of individual staff members, the Firm’s risk profile, and consider the views of shareholders and other stakeholders when making decisions.

The Committee has appropriate discretion to ensure that remuneration outcomes are commensurate with company performance and are not excessive; and must explain why the chosen maximum remuneration level is appropriate for the company and provide a clear rationale for any significant increase to any element of remuneration.

4. RISK ALIGNMENT

Remuneration is structured in a way that encourages sound risk management.

The Firm has a number of measures in place to mitigate the risks associated with remuneration and discourage excessive risk-taking, such as deferral, malus and clawback provisions.

The Committee will ensure that variable remuneration is tied to risk management. Employees whose actions may affect the risk profile of the firm will have a significant portion of their variable remuneration subject to risk adjustments.

5. QUANTITATIVE DISCLOSURE

For the financial year 1 January 2023 to 31 December 2023, the total amount of remuneration awarded to all staff was £556,000, of which £449,000 comprised the fixed component of remuneration, and £107,000 comprised the variable component.