Financial Services and Markets Act 2000 – NOTICE
Exemptions and Suitability
PROSPECTIVE INVESTORS & TRUSTEES / NOMINEES MUST READ THE BELOW NOTICE AND CONFIRM THEIR UNDERSTANDING AND ELIGIBILITY BY SIGNING THE BOND PURCHASE FORM.
The content of this communication, and any promotion it contains or refers to, has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on this promotion for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested.
Any person who is in any doubt about the investment to which this communication relates should consult an authorised person specialising in advising on investments of the kind in question.
CGrowth Capital Bond Ltd (the Company) is a limited liability company incorporated and registered in England and Wales with company number 9789214 whose registered office is at 20-22 Wenlock Road, London N1 7GU. The Company is not authorised and regulated by the Financial Conduct Authority.
The issue of the bonds by the Company is excluded from the general prohibition against carrying on a regulated activity (as specified in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (the RAO)) as an unauthorised person (as set out in section 19 of the Financial Services and Markets Act 2000 (the FSMA)) on the basis that:
a) the Company is not establishing, operating or winding up a collective investment scheme (as defined in section 235 of the FSMA) (specified as a regulated activity in article 51ZE of the RAO) since the Company is a body corporate, which is not an open-ended investment company (as defined in section 236 of the FSMA), and as such it (and the issue of bonds by it) is not a collective investment scheme pursuant to the exclusion set out in paragraph 21(1) of the Financial Services and Markets Act 2000 (Collective Investment Schemes) Order 2001;
b) whilst the Company is accepting deposits (specified as a regulated activity in article 5 of the RAO) to on lend to others this is in consideration for the issue of debt securities, and as such is excluded from the regulated activity of accepting deposits pursuant to the exclusion set out in paragraph 9 of the RAO; and
c) whilst the Company is dealing in investments as principal (specified as a regulated activity in article 14 of the RAO) and arranging deals in investments (specified as a regulated activity in article 25 of the RAO) as it is issuing its own instruments creating or acknowledging indebtedness it is excluded from these regulated activities pursuant to articles 18 and 34 of the RAO respectively.
This communication in relation to the issue of bonds by the Company is exempt from the general restriction in section 21 of the FSMA on making financial promotions where the promoter is not an authorised and regulated person for the purposes of the FSMA on the grounds that it is made to and directed at persons reasonably believed to be:
a) persons falling within the definition of investment professional contained in article 19 of the FPO ("Investment professionals), namely authorised persons; persons who are exempt in relation to the promotion of investments of this nature; persons whose ordinary activities involve them investing in unregulated schemes; governments; local authorities or international organisations; or a director, officer or employee acting for any of the entities listed in this paragraph (a) in relation to engaging in investment activity (provided that the communication is made to the director, officer or employee in this capacity and when acting in this capacity they are involved in the entities' participation in non-readily realisable securities);
b) persons falling within article 49 of the FPO ("High net worth companies, unincorporated associations etc"), namely bodies corporate with called up share capital or net assets of not less than £5 million (except where the body corporate has more than 20 members in which case the share capital or net assets should be not less than £500,000); unincorporated associations or partnerships with net assets of not less than £5 million; trustees of high value trusts; or a director, officer or employee acting for any of the entities listed in this paragraph (c) in relation to engaging in investment activity (provided that the communication is made to the director, officer or employee in this capacity and when acting in this capacity they are involved in the entities' participation in non-readily realisable securities);
c) persons who fall within article 48 of the FPO ("certified high net worth individual"), namely a person who has signed, within the period of 12 months ending on the date on which this communication is made, a statement in the terms specified in Part 1 of schedule 5 of the FPO;
d) persons who fall within article 50 of the FPO ("certified sophisticated investor"), namely a person who (1) has a written certificate within the last 36 months by a firm confirming he has been assessed by the firm as sufficiently knowledgeable to understand the risks associated with engaging in activity relating to non-readily realisable securities and (2) who has signed within the period of 12 months ending on the date on which this communication is made, a statement in the terms specified in article 50 of the FPO;
e) persons who fall within article 50A of the FPO ("self-certified sophisticated investor"), namely a person who has signed, within the period of 12 months ending on the date on which this communication is made, a statement in the terms specified Part 2 of Schedule 5 of the FPO; and
f) any other person to whom the communication may otherwise lawfully be made in accordance with the FPO or otherwise.
Prospective subscribers should consider if an investment in bonds issued by the Company is suitable for them in light of their personal circumstances and the financial resources available to them.
Subscribing for bonds issued by the Company carries a high degree of risk and the attention of prospective subscribers is drawn, in particular, to the section headed "Particular Risks." It is not an activity covered by the UK Financial Services Compensation Scheme (FSCS) and consequently applicants will not be eligible to apply for any compensation from the FSCS.
The Projects' main assets are commodity resources. Relentlessly depressed commodity prices could limit profitability and result in a loss.
A weak oil price and a weak US Dollar could compound such an event at any point in time. Conversely, in balance, a strong oil price and a strong US Dollar may have the opposite effect. Equally whilst commodity prices remain in US Dollars movement in Peruvian currency may have an impact.
Whilst the project companies may hold extensive arrays of risk insurance policies, commercial risks of total or partial loss for whatever reason may not be covered under such policies in exceptional events for whatever unforeseen reason. Non-payment of insurance premiums would also likely render any such policies void in any insured event of claim.
The ability for the Bond Issuer to repay capital and interest is based upon the project company borrowers repaying. Insolvency of a project company borrower may result in reduced, delayed or no payments.
In the event of the insolvency of any of the project borrowing companies and an eradication of the value of the main security assets for whatever reason, a partial or total loss could occur.
Changes in legislation or the relationships between countries can or may change over time affecting the business overall, this could have an impact if such relationships changed and were not in the best interests of the project borrowing companies or the Bond Issuer.
The Bond Issuer and the project companies conduct transactions in a broad range of currencies, currency exchange rates may impose a risk of partial losses to the project companies in unforeseen adverse circumstances.