Future Fund Frequently Asked Questions (FAQs) for Solicitors

All defined terms in this document are set out in the Glossary of Terms document available on the portal.

These FAQs are provided for informative purposes. They are not intended to provide advice of any kind (including legal, financial, tax or other professional advice). You should seek professional or specialist advice before doing anything on the basis of this content. Please review this set of FAQs in conjunction with the FAQs for Investors and FAQs for Companies on the portal. There is important information relevant to you as a solicitor in both of these documents.

More information about applications from non UK parent companies

General

What is the Future Fund?

Full details of the scheme can be found on the overview page of the Future Fund website.

What are the contractual arrangements under the Future Fund and who are the contracting parties?

The contractual arrangement (to lend funds to the Investee Company) will be entered into by way of Convertible Loan Agreement. Further details on the Convertible Loan Agreement can be found on the Solicitors page of the Future Fund website.

The parties to the Convertible Loan Agreement shall be the Investee Company, the Future Fund (UK FF Nominees Limited) and the other Investors providing the matched funding.

A copy of the Convertible Loan Agreement can be found on the Solicitors page of the Future Fund website.

Who is UK FF Nominees Limited?

UK FF Nominees Limited is the entity that enters into Convertible Loan Agreements on behalf of the Future Fund. UK FF Nominees Limited is the legal titleholder to the Future Fund’s Loans and any shares resulting from their conversion. It holds beneficial interest in the Loans (and any shares resulting from their conversion) on bare trust for the benefit of the Secretary of State for Business, Energy and Industrial Strategy.

Will my client be required to sign any other documents?

If you act for the Investee Company, a director of the Investee Company will be required to provide a director’s certificate in respect of certain confirmations to be given by the Investee Company.

Information submitted throughout the application process is subject to terms and conditions.

A copy of the director’s certificate can be found on the Solicitors page of the Future Fund website.

What is the timeframe for investment under the Future Fund?

The Future Fund will launch in May 2020 and will initially be open until the end of November 2020.

Does the Government expect to make a return?

The Future Fund will operate on a fully commercial basis, on the same terms as third-party investors.

In the scenario where the loan converts, which government entity would be on the company’s cap tables?

UK FF Nominees Limited. This entity holds legal title to the Future Fund’s Loans and any shares resulting from their conversion on behalf of the government.

How will the Future Fund ensure that funding decisions are fair and that it supports a broad range of companies?

The Future Fund allocates funding by applying a set of standardised eligibility criteria. These criteria are published on the website. They have been developed to allow for a broad range of companies to benefit from the Future Fund, while protecting taxpayer investment. To protect the use of public funds, all applications will be assessed against UK Government investment standards on specific jurisdictions by reference to factors such as sanctions, tax transparency, and the cost and complexity of implementation. The UK Government will also take into account concerns around the proper use of public finances and wider public policy risks, as well as whether investment would undermine the integrity or public credibility of the Future Fund

Solicitors’ role

I have been engaged by my client in relation to the Future Fund – what is my role as a solicitor?

You may be asked by your client to assist in two aspects in relation to the Future Fund scheme:

  • Legal advice: you may be asked to advise on the scheme and its associated documents, by either an Investor or the Investee Company (further information about the scheme and the application process can be on the Solicitors page of the Future Fund website). and/or
  • Settlement: if you act for the Investee Company it is a requirement of the scheme that you facilitate completion and you must therefore be a UK regulated solicitor permitted to receive and hold client money – this will involve receiving and holding the completion monies to order from the Lead Investor and any Other Investor (or their solicitor(s)), to be released to the Investee Company on execution of the Convertible Loan Agreement and upon confirmation from the Future Fund via the Future Fund portal. You will also receive the completion monies from the Future Fund post-completion, which you will send as soon as possible to the investee company. Please see the FAQs on Settlement and Regulatory Guidance for further information on settlement/completion and handling client money.

I have been engaged by my client in relation to the Future Fund – do I need to register/apply to act under this scheme? Is there a panel of approved firms?

No, you do not need to register or apply to act under the scheme and there is no panel of approved firms.

If you act on behalf of the Investee Company, your client will provide your details as their nominated solicitor on the Future Fund portal. We will then contact you.

There are certain restrictions on your ability to act which are set out in the “Solicitor requirements” FAQs; please see below for further information.

Solicitor requirements

What are the solicitor requirements to act for my client in relation to the Future Fund?

To be able to act for your client in respect of this scheme, you are required to meet the following criteria:

  • you must be a practising UK regulated solicitor – registered with the relevant UK regulatory body set out below; and
  • if your client requires you to handle any completion monies, you must be permitted to hold client money and have a client account in accordance with the rules of your relevant UK regulatory body.

Please consult the website of your UK regulatory and/or professional body for further guidance:

Information is also available on the website of the Law Society of England & Wales

I am a freelance solicitor regulated by the SRA – can I act?

You are not prohibited from providing legal advice to your client in respect of the Future Fund.

However, you will be unable to act if your client requires you to handle any completion monies, as freelance solicitors are not permitted to hold client money, save for money that relates to their fees and disbursements.

My firm is regulated as an Alternative Business Structure in England & Wales – can I offer this service?

You must meet the “Solicitor requirements” set out above.

Settlement – Handling the completion monies

I am instructed to act for my client in relation to settlement – can I act if I don’t have a client account?

No, in order to deal with the completion monies you must be permitted to handle and capable of handling client money.

I am advising an Investor – can I handle my client’s completion monies?

Your regulatory and legal obligations in relation to Know Your Client, AML, source of funds, and conflicts checks must be observed. If you have any concerns or questions, please contact your regulator.

If you act for an Investor, your client will receive notifications through the Future Fund portal of the progression of their application, including the request to transfer their completion monies to the nominated Investee Company’s solicitor’s client account. If you are instructed to handle your client’s completion monies on their behalf, you must be a UK regulated solicitor permitted to handle client money and you must act in accordance with the rules on client money applicable to you by your UK regulatory body.

Please note: As the nominated Investee Company solicitor will be required to provide the Future Fund portal with a standard form confirmation letter addressed to UK FF Nominees Limited on receipt of the full amount of the Investor completion monies from the Lead Investor and any Other Investor(s) (as applicable), you must ensure that your client’s completion monies are transferred to the nominated Investee Company solicitor in accordance with the requirements of this letter.

A copy of the solicitor’s confirmation letter can be found on the Solicitors page of the Future Fund website.

I act for the Investee Company – what is my role at completion?

A diagram of the settlement process can be found on the Solicitors page of the Future Fund website

Your involvement is summarised below:

  1. before completion, you will need to receive into your client account, and hold to order pending completion, the full amount of the completion monies on behalf of the Lead Investor and any Other Investor(s) (as applicable);
  2. as the nominated Investee Company solicitor, you will be required to provide the Future Fund portal with a standard form confirmation letter addressed to UK FF  Nominee Limited on receipt of the monies described in point (1) above. You must ensure that these monies are transferred to you in accordance with the requirements of this letter;
  3. it will be your responsibility to liaise with the Lead Investor and any Other Investor(s) (or their solicitor(s)) to ensure that you receive the monies described in point (1) above and to agree with them the terms under which you hold those monies;
  4. along with the confirmation letter for signing and dating by you, the Future Fund portal will also issue the Convertible Loan Agreement for signing (but not dating) by the Lead Investor and any Other Investor(s) and the Investee Company. The Future Fund portal will also request an executed director’s certificate from the Investee Company;
  5. if the Future Fund portal has not received your signed and dated confirmation letter, as well as the signed and dated director’s certificate and signed (but not dated) Convertible Loan Agreement within seven days, the Future Fund portal will ask you to re-confirm that you continue to hold the full amount of the Lead Investor and any Other Investor(s) completion monies to their order in your client account;
  6. the Future Fund portal will then issue a fully executed and dated Convertible Loan Agreement. This constitutes completion and will be the trigger for the Future Fund portal to instruct UK FF Nominee Limited’s bank to transfer its completion monies to your client account; and
  7. after completion, you should release the Lead Investor and any Other Investor(s) completion monies to the Investee Company’s bank account in accordance with your instructions and you should send the completion monies from UK FF Nominees Limited to the Investee Company’s bank account as soon as possible once received in your client account.

Your regulatory and legal obligations in relation to Know Your Client, AML, source of funds, and conflicts checks must be observed. If you have any concerns or questions, please contact your regulator. If you require information on the Fund Fund’s legal structure, ownership and control for the purposes of meeting your regulatory and legal obligations then please email futurefundsupport@british-business-bank.co.uk and a KYC Corporate Information pack will be shared with you.

A copy of the standard form of solicitor confirmation letter mentioned above at point (2) can be found on the solicitors page of the Future Fund website.

Is there a currency requirement for the investment funds?

All investment funds need to be in pounds sterling. All investments being made by Investors will also need to be made in pounds sterling.

Regulatory guidance

Have the UK solicitor regulatory and professional bodies provided any guidance on the solicitor’s role in the Future Fund?

These roles, as envisaged in the proper administration of the scheme, have been examined by the professional and regulatory bodies in each UK jurisdiction and are considered as being compliant with their rules on professional conduct and with their accounts rules.

Please consult the website of your UK regulatory and/or professional body for further guidance:

Information is also available from the Law Society of England and Wales.

Do I need to provide a client care (engagement) letter for this service and if so, what information about the scheme do I need to include in it?

You should act in accordance with the rules applicable to solicitors by your relevant regulatory body in England & Wales, Scotland and/or Northern Ireland (as applicable).

I act for the Investee Company, I am instructed in relation to settlement only and I am a solicitor in England and Wales – will the SRA deem this service to be an improper use of a client account as a banking facility under rule 3.3 of the SRA Accounts Rules?

Solicitors in England & Wales asked to perform the settlement process only, and who are not providing any related regulated legal advice, should consult the SRA Q&As.

Are there any particular conflict of interest restrictions that I should consider?

Independence of legal advice should be prioritised at all times. You should act in accordance with the rules and guidance applicable to solicitors by your relevant regulatory and/or professional body in England & Wales, Scotland, or Northern Ireland (as applicable). KYC and conflicts checks should be undertaken as you would do in any other matter when taking instructions from your clients.

Charging fees

Can I charge a fee for this service?

There is no prohibition to charging for fees, but your fee arrangements must be agreed with and communicated to your clients in accordance with your engagement letter and the  rules and guidance applicable to solicitors by the relevant regulatory and/or professional body in England & Wales, Scotland and/or Northern Ireland (as applicable). It is good practice to ensure that your clients are aware of your fees and charging structure prior to undertaking any work.

Can I deduct my charges and expenses from the completion monies when it is in our client account, before paying it out to the client?

This will depend on the fee arrangement that has been agreed with your client. You should act in accordance with the rules and guidance applicable to solicitors by the relevant regulatory and/or professional body in England & Wales, Scotland and/or Northern Ireland (as applicable).

Additional Questions

Does a crowdfunding nominee SPV which represents all of the underlying crowdfunding investors qualify as a Lead Investor?

Yes, if the platform’s nominee SPV is the investor on record and a party to the CLA on behalf of the underlying crowdfunding investors.

If any crowdfunding investors are also to invest directly (outside the nominee structure) they would need to be added as “Other Investors” through the Application, with their details to be provided as they would also become parties to the CLA.

Can an Investee Company have more than one Application?

No, only one Application per Investee Company can be accepted. A Lead Investor must initiate an Application on behalf of all the Investors (other than the Future Fund) that would propose

Is the Freedom of Information Act applicable to the Future Fund?

The Future Fund is designed by government and delivered by the British Business Bank. As such, the Future Fund, and FF UK Nominees Limited, are subject to the Freedom of Information (FOI) Act, which gives individuals a right to request any recorded information held by a public authority.  Under the FOI Act, public authorities have the right to withhold information using the relevant exemptions included in the Act  Any information requested which is commercially sensitive to either the British Business Bank, Future Fund investors or investee companies can be withheld under S43(2) commercial interests.  Where required, BBB may consult with you to understand how the release of requested information under the FOI Act would or would be likely to prejudice your commercial interests.

If you want to find out more about the Freedom of Information Act please visit https://www.gov.uk/make-a-freedom-of-information-request.

What are the Future Fund terms and conditions?

View the Future Fund terms and conditions. The terms and condition of the CLA can be found on the Solicitors page of the Future Fund website.

How do I log a complaint?

You can log a complaint by (1) completing the online enquiry form,  (2) emailing our support team, or (3) phoning our support team. Contact details can be found on the support page of the Future Fund website.

What is the cut-off point for new applications and how does this impact existing applications?

The Future Fund is open for new applications to be made until 23:59 GMT on Monday 30th November 2020. The portal will then be closed to new applications.

A new application is an application that has been correctly completed and submitted by a lead investor and matched by the investee business. If an application is not correctly completed and submitted by the cut off date, it will be rejected as an incomplete application.

The portal will remain open to existing applications that have been correctly completed and submitted by the cut off date. We will continue to keep these applicants informed of progress and work with them beyond 30 November 2020 to complete the next steps. All applications will need to have been accepted and legally completed, with the relevant CLA executed by all parties, including the Future Fund, by 23:59 GMT on Monday 30 November 2020.

Are prospective applicants that are not ready to apply by 30 November 2020 able to submit their interest by this date and then retrospectively complete their application?

No, please ensure that all preparatory work and confirmations required for an application are completed and approved by the business ahead of 30 November 2020. Any changes to the application (such as a change in the lead investor or change to investment amount) after this date may delay the processing of the application or may result in the application being rejected.

Please refer to Application Guidance for advice to investors and companies applying to the Future Fund.”

I have submitted an application that is currently being processed. What happens if this processing has not been completed by 23:59 GMT on 30 November 2020?

Applications submitted by a lead investor that have been matched by the business by 23.59 GMT on Monday 30th November 2020 will continue to be processed after 30 November 2020.  Such applications will need to have been accepted and legally completed, with the relevant CLA executed by all parties, including the Future Fund, by 23:59 GMT on Monday, 30 November 2020.

If I identify after the application closure date that a co-investor is not eligible (based on their application), will there be an option to submit a new application after 30 November 2020?

A new application cannot be submitted after 23:59 GMT on Monday 30th November 2020. Should one of your co-investors not be eligible (e.g. a connected party), you will not be able to receive matched funding for their investment. Accordingly, please ensure you have sought advice from your advisers on the eligibility criteria and that your application and parties involved satisfy these fully. Should you have any questions on this, please refer to the FAQs on our website or contact us by email, web form and telephone.