News Briefing - Crowdfunding, SME And Alternative Finance

the silicon chip inside her head

1.UK – FinTech 

 

The equity side of the crowd is in crisis. AltFi reports: 


“The Competition and Markets Authority (CMA) has put a potential spanner in the works for the planned takeover of Seedrs by fellow crowdfunding platform Crowdcube. 

In a notice published yesterday, the CMA said the proposed merger “may be expected to result in a substantial lessening of competition (SLC) within the supply of equity crowdfunding platforms to SMEs and investors in the UK.” 

The provisional findings proposed “the only effective remedy is likely to be a prohibition of the merger.”  

Following an investigation, the CMA has determined that the merger will see the new company hold a combined share of between 90 to 100 per cent of the equity crowdfunding market in the UK. 

On the provisional findings of the CMA, executive chairman and co-founder of Seedrs, Jeff Lynn wrote: “The UK Competition and Markets Authority (CMA) published its provisional findings on our proposed merger with Crowdcube today, and they demonstrate that the CMA remains determined to block this transaction.” 

“We are deeply disappointed with these findings, and we firmly disagree with the CMA’s view that this would be an anti-competitive transaction. We believe strongly and unreservedly that this merger would have a highly positive outcome for British small businesses, helping to provide vital funding for thousands of ambitious companies in the future.” 

Both Seedrs and Crowdcube also recently said that the merger is vital to their survival.” 

 

2. UK – FinTech 


But the angels aren’t going away…  

Osu, a new instant payments app aimed at helping the UK’s four million self-employed has raised  £2.25m seed round, according to AltFi.  


“The funding comes from a round led by Creandum with cash also from Ada Ventures, Breega and prolific angel investors including Charles Delingpole, CEO of ComplyAdvantage, Will Neale of Grabyo and Michael Pennington of Gumtree.  

Launched in 2020 by co-founders Noam Nevo, Daniel Scott and Alon Zion, Osu says it has 1,000 people using its app with plans to grow ten-fold in 2021. 

Users send a payment request by entering their customer's name, phone number, and the amount owed. The customer receives an SMS and pays by clicking a link, selecting their bank, and then approving the payment instantly within their own banking app.” 

 

3. UK – FinTech 


Finextra reports: 


“Controversial stock trading app Robinhood has filed paperwork with the Securities and Exchange Commission for an initial public offering. 

The company has been at the centre of a battle between activist retail investors and hedge funds shorting stock in companies such as GameStop and AMC Entertainment.

Robinhood temporarily stopped users from buying dozens of stocks that day traders who use the WallStreetBets subreddit had targeted in a short squeeze assault.

This led to probes by regulatory authorities and the filing of around 46 putative class actions and three individual lawsuits.

The firm was also forced to raise $2.4 billion in convertible debt to cover collateral requirements with clearing houses during the surge in trading.

Robinhood signaled its intention to go public on the Nasdaq earlier this month, although it is not yet clear whether the firm will opt for a traditional IPO or a direct listing.” 

 

 

4. UK – FinTech 

 

The Fintech Times runs a feature interview focused on regulation advice: 

 

“In the last 12 months, business environments have completely changed and former standards and beliefs have become obsolete. A year ago, many still considered on-premise software to be safer than the cloud. This thinking has been washed away as we all work from home.  Going forward, savvy financial institutions will open the way they work to inspire new business models that support increased agility – not only in the way they service clients and manage employees but also with regard to regulation and compliance.  

Financial institutions were quick to adapt and move away from the limiting businesses models of the twentieth century. But the rise of digitalisation, cloud and platformification is triggering a profound change in the process of buying, implementing and running software. Consuming functionality ‘as a service’ means that software, hardware and operations are no longer relevant. What‘s important is achieving results.  

A ‘Regulation as a Service’ approach will become the new normal, to the relief of banks and financial institutions as they will no longer need to deal with managing software implementation. Financial institutions will share all relevant data securely through the cloud with selected ecosystem partners, for processing in full compliance with regulations across all relevant jurisdictions.” 

5. International – FinTech 

 

Crowdfundinsider reports on China’s move to steal a march in CBDCs: 

 

“China’s officials have addressed concerns that the digital yuan may be violating or infringing on user privacy. They’ve looked into questions related to “controllable anonymity” as well. 

STCN reports that on March 20, 2021, Mu Changchun, Director of the Digital Currency Research Institute of the People’s Bank of China (PBoC), provided an explanation regarding the “controllable anonymity” of the virtual yuan during the 2021 China Development Forum. 

Changchun pointed out that “controllable anonymity” was a key feature of virtual renminbi and it also reflected its M0 positioning. Additionally, the feature aims to protect the public’s requirements for conducting “reasonable anonymous” money transfers and also aims to provide a certain level of personal information protection. 

Chinese official explained that there are features which will prevent illicit activities such as money laundering and terrorism financing. Other illegal financing activities, tax fraud, or evasion will also be addressed by these new financial platforms. 

Mu Changchun pointed out that user privacy will be maintained by the new digital renminbi currency system. But the anonymity of the central bank’s digital currency is only “limited anonymity” and applies as long as associated risks are “controllable.” 

Chinese officials also claim that a “completely anonymous” central bank digital currency or CBDC might not be practical or feasible. Currently, the digital yuan pilot testing is progressing smoothly, the officials confirmed. 

Mu Changchun added that mainstream payment solutions like bank cards, WeChat, or Alipay in China are still largely dependent on the regular bank account system. And opening new bank accounts requires people to provide their real names, which means that (like in almost all other countries) they can’t be anonymous. 

The virtual yuan, however, is “loosely coupled” with the regular bank account, allowing small amounts to be transferred in an anonymous manner (technically speaking). The digital renminbi wallet adopts a “hierarchical and classified design.” There are also different levels of digital wallets that may be created. They’re based on varying levels of KYC requirements.”