A bridging company has been authorised by the FSA to run an Unregulated Collective Investment Scheme (UCIS).
Mayfair Bridging said its scheme will target sophisticated investors looking to find high returns from different investment sources.
Its scheme is based on the concept of peer-to-peer lending, where investors will earn a return from the specific bridging loans they choose to invest in. Investors will only be exposed to those loans.
Mayfair aims to pay a net return of 10.2% per annum.
The scheme will be promoted via IFAs who will be paid commission.
The firm said that although many new funding models such as crowd funding have struggled to gain recognition from the FSA, its own product was specifically designed to meet regulatory standards.
Shoaib Bux, director of Mayfair Bridging, said: “We are delighted to gain authorisation from the FSA to offer syndicated loans as UCIS.
“When we first looked at this funding model it seemed to us a quirk of regulation that a single loan was not regulated but a syndicated loan is classified as an UCIS.
“However, when we explained to the FSA what we wanted to do, the investors we would target and the safeguards that are in place, they agreed to authorise us to provide this product.”
Although the rules relating to the distribution of UCIS are expected to be tightened up by the FSA in the New Year, Mayfair Bridging said it does not perceive any hurdles for its own offering.
See also next story about peer-to-peer lending.
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