CIC Association

Serving Community Enterprise

Caps set at 20% (shares) and 10% (performance loans)

Here's the link to the Regulators full response

Please put your thoughts on record here, from an initial reading I have to say this looks quite balanced and positive.

The concern regarding it causing a detrimental effect to any grant funding has been noted so hopefully we'll get some centralised work done on that, the current situation is pretty erratic already.

It definately opens up the potential in the CLS model. In my opinion 20% isnt too much but is generous,the shares will still be illiquid so rampant speculation isnt about kick the door in, its a positive step. This WILL attract a whole new range of potential funding, and even though its a slight stretch of the social investors imagination we can now say there is potential for a return of capital in 5 years. When matched against a testing environment this could help solve some of the funding issues anticipated, so we'll probably go all out and focus on the positive outcomes this should create. The Regulator will be reviewing again in 2/3 years, so its important we all ensure we keep feeding good data in.

We'll definately be discussing this at CIC Start 2010 on the 18th so come along if you want express your views, the afternoon session is destructured to allow the debate to develop on the day.


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Comment by Simon Lee on January 6, 2010 at 10:22
It's good to see the response from the CIC Regulator - seems balanced to me and we'll definitely be letting clients know of the increased potential of the CIC limited by shares.

I think that the CIC model (and social enterprise in general) has a lot to offer in these more uncertain economic times so hope to see the sector grow in the short to medium term.
Comment by Dr Joseph Hemingway on January 6, 2010 at 1:53
hi John, I echo Tom's comment's below, this should attract more investment to CiCS?, hopfully, time tells all.
Comment by Tom Barnett on January 5, 2010 at 23:25
Well reported, John. I agree with you that it is a well balanced, postive andmeasured decision that will help build solid foundations for future of CICs.

In particular, for me, the fact that so few SMEs are using equity as a route to finance was a surprise. As John has said, whilst CIC shares still remain illiquid it woudl appear that this will not have too greater impact on the ability to of CICs to finance themselves. And by making lending attractive to investors, banks and other sources of finance will focus their attention on CICs. It strikes me quite suddenly that this is an excellent short term measure to finance the emerging CIC market.


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