This week, the Chancellor of the Exchequer, Jeremy Hunt, revealed the UK government’s Spring Budget. While the list of policies and changes is rather long, the UK Crowdfunding Association (UKCFA) has highlighted several changes that will benefit the industry.
First, there is an increase in the ISA amount (retirement savings accounts). The new “British ISA” will enable an additional £5000 to be dedicated to UK firms. For the UK crowdfunding industry, this could be beneficial as more investments in UK private firms that have utilized online investment platforms could be held in these retirement accounts.
Second, the government has decided to review the determinations of High-Net-Worth (HNW) and Sophisticated Investors. The government aims to lower the wealth/income hurdles to allow more individuals to qualify.
And finally, PISCES, or the Private Intermittent Securities and Capital Exchange System, could enable a private securities marketplace that caters to smaller private firms. Liquidity in private shares is good both for investors and firms. For investors, it can provide an alternate path for an exit instead of a merger or acquisition or public offering. While most investors in private securities understand that liquidity is limited, life changes. And many early-stage firms give shares to employees as a form of remuneration. If a private securities marketplace is created effectively, this could be a boon for the private securities market – including investment crowdfunding.
