“Protecting our investors is our primary concern”
- Cameron Richards, Investment Director
Security Trustee
At Trust Green, we prioritise the security and peace of mind of our investors above all else, recognising the paramount importance of risk mitigation in your investments.
That's why we've appointed FCA-registered Debquity Partners as our Security Trustee, a team composed of seasoned professionals with over 99 years of combined experience in risk management, including former heads of risk at major UK banks.
Their expertise is instrumental in safeguarding our investors' interests, ensuring swift and effective action in the unlikely event of project non-completion, thereby reinforcing our unwavering commitment to protecting your investments with the utmost diligence.
What will the Security Trustee do?
The principal duty is to shield the interests of our investors, ensuring securities are properly documented and managed, and initiating necessary enforcement actions if a borrower defaults on a loan.
Key Roles and Responsibilities of the Security Trustee:
The Security Trustee will be responsible for conducting Anti-Money Laundering (AML) and Know Your Customer (KYC) checks on investors before they invest.
They hold the register of investors' interests and register the agreed security charges at the Land Registry on behalf of the investors for each project.
They monitor the project on behalf of investors, and the appointed monitoring surveyor reports to them. The Security Trustee ensures that these reports are completed to an acceptable standard.
In any complex situation, their role is primarily to ensure the security of the investor's funds and legal compliance. They have the autonomy to take necessary actions to protect these interests.
Roles and Responsibilities
Scope of Authority:
The Security Trustee will be responsible for conducting Anti-Money Laundering (AML) and Know Your Customer (KYC) checks on investors before they invest.
They hold the register of investors' interests and register the agreed security charges at the Land Registry on behalf of the investors for each project.
They monitor the project on behalf of investors, and the appointed monitoring surveyor reports to them. The Security Trustee ensures that these reports are completed to an acceptable standard.
In any complex situation, their role is primarily to ensure the security of the investor's funds and legal compliance. They have the autonomy to take necessary actions to protect these interests.
Investor Engagement:
The Security Trustee will ensure the loan agreement and the agreed security are implemented at the land registry on behalf of investors.
The Security Trustee will hold a register of all investors' interests and their investments.
The Security Trustee will sign any legal documents on behalf of the investors.
The Security Trustee will be involved in ensuring the transparency and regularity of the investors with quarterly investment reports.
They will also facilitate and oversee site visits by investors, ensuring these visits are productive and informative.
Risk Assessment:
The Security Trustee will approve a monitoring surveyor to carry out the initial risk assessment and will ensure that these reports are completed to an acceptable standard.
Legal Framework:
They must operate within the guidelines and regulations of the Financial Conduct Authority (FCA), particularly in conducting AML and KYC checks.
They will ensure all investor funds are passed to the Escrow Agent, or nominated solicitor client account until such time as checks have been carried out, and all legal documentation is in place.
They will monitor any legal undertakings from the appropriate legal professional that has been appointed and will ensure legal charges are in place before giving approval for the release of funds to the developer.
Breach of Duty:
In the event of a breach of duty by the Security Trustee, the Security Trustee can be removed from the role by the investors and a claim can be made under their professional indemnity insurance.
Coordination with Risk Professionals:
The Security Trustee is the appointed risk professional and will ensure the integration of risk management within their responsibilities.
Crisis Management:
In case of borrower default, the Security Trustee will initiate and manage the process of enforcing the charge over the asset. This includes legal proceedings if necessary.
They will also communicate clearly and promptly with investors about the steps being taken and the implications for their investments within a reasonable time.
Performance Evaluation:
Metrics for evaluating the Security Trustee include the accuracy and timeliness of AML/KYC checks, effectiveness in registering and managing charges, and responsiveness to investor concerns within a reasonable time.
Regular quarterly reviews of their appointed monitoring surveyor reports, and taking any corrective decisions to manage the project to delivery will be part of the evaluation.
Conflict Resolution:
The Security Trustee will not have any financial interest in projects undertaken by Trust Green. Their emoluments will be fixed as per the investor agreement.
Roles and Responsibilities
The Function of the Security Trustee:
The Security Trustee is particularly appointed to monitor and manage the security aspects of all investments undertaken by Trust Green.
Independent management oversight is also provided, ensuring that the investors' interests are consistently safeguarded.
Core Responsibility:
The principal duty is to shield the interests of our investors, ensuring securities are properly documented and managed, and initiating necessary enforcement actions if a borrower defaults on a loan.
Appointment Procedures:
Details of Appointment:
The Security Trustee's appointment, inclusive of their rights and obligations, is articulated within the articles of association of Trust Green.
Authorised Actions:
Scope of Authority:
The Security Trustee has the authority to execute actions on behalf of our investors, playing a crucial role in safeguarding our investment portfolio.
Risk Management and Oversight:
Risk Professional Onboarded:
A seasoned risk professional has been onboarded specifically to provide assurance concerning our lending documents to all our investors. This expert imparts independent oversight over management and acts as a defence against potential risks.
Specific Roles of the Risk Professional:
Nominee Observer: Functions as the agent or nominee for our investors.
Legal Document Review: Independent legal assurance is sought by the risk professional from the appointed legal team, providing an additional layer of confidence to our investors concerning the fitness of the lending documents.
Independent Risk Assessment: As stated in our company articles, independent risk assessments are always performed. These assessments are conducted by our appointed risk professional.
Management Oversight: An additional layer of oversight is provided, particularly concerning potential management risks, ensuring secure investors' capital.
At Trust Green, we prioritise the security and assurance of our investors above all else. With our appointed Investment Security Professional and risk professional, we strive to provide a robust investment environment.
We have appointed Debquity Partners for this role. More information about their services can be found on the Debquity Partners website.
Additional Assurance:
Backed by Professional Indemnity:
The services of Debquity are supported by their professional indemnity, ensuring that all services are insured. This indemnity is analogous to that obtained by other professional services.
Breach of Professional Duty:
This is critically vital for a company acting in a fiduciary role. If they are perceived not to have acted in the best interests of their clients, they could be subject to legal action.
Frequently Asked Questions
How will the Security Trustee handle cases where potential investors do not meet the AML/KYC criteria?
The investors will be rated on a number of factors such as their tax residency, occupation, citizenship, and corporate structure and rated low, medium and high risk. Medium and high risk have to go through enhanced due diligence. All investors need to pass PEP and Sanctions checks. They have to provide the details of the source of wealth and source of funds. The investors who cannot pass on these checks will not be able to invest through the trustee.
What specific process will be followed for registering charges at the Land Registry?
The charge will be registered at the Land Registry by the Security Trustee on behalf of the investors.
How will ongoing management and monitoring of these charges be conducted?
All such charges will be monitored for any changes by the trustee. Any change will immediately be investigated and necessary action will be taken promptly.
What are the terms of the security being offered by the developer?
The developer is offering a second charge to investors. We will utilise senior debt financing, wherein the senior debt provider will hold the primary security. Investors will be positioned second in the security ranking, directly following the senior debt provider. This arrangement ensures that investors have priority over all other creditors and the developer.
Who is the monitoring surveyor?
Trust Green acts as the appointed monitoring surveyor for the developments and will provide quarterly reporting and site visits to provide updates to our investors. With an approved reporting format and Key Performance Indicators, Trust Green will share reports of progress updates every quarter, which include a video report. The Security Trustee will ensure that these reports are completed to an acceptable standard.
How will the Security Trustee manage investor expectations in the face of unforeseen challenges in investment projects?
The Security Trustee will manage any risks themselves and keep investors updated about the delay or any other issues in the project.
What are the detailed steps and protocols the Security Trustee should follow in the event of a borrower default or other crisis?
The Security Trustee will take legal advice and will seek assistance from the recovery professional to ensure the best course of action to protect the investor's interests.
What specific communication protocols will be used with investors during crisis situations?
The required legal professional will be appointed to provide the necessary advice.
What are the specific performance indicators for evaluating the Security Trustee's effectiveness?
Regular monitoring of the charges placed on the land registry.
Regular report on project updates as provided by Trust Green, The Developer, and the Appointed Monitoring Surveyor.
Arranging a site visit as per the investor's request within 4 weeks.
What specific mechanisms and processes will be implemented for investor resolution and redress?
Any dispute will be properly investigated by the Security Trustee with the assistance of Trust Green. The Security Trustee will decide the best course of action and resolution on behalf of the investors. The Security Trustee is appointed with the outcome of ensuring project delivery with the best profit potential for investors, whilst managing any emerging risks. The trustee will take legal advice and will seek assistance from the recovery professional to ensure the best course of action to protect the investor's interests.
Example One: If there is a timeline delay in the project, this would be a default under the investment agreement, the trustee could take it to recovery, but the trustee will always act in the interest of investors interest by seeing how the delay will be recovered by looking at options based on monitoring surveyor reports and their professional advice. Case-by-case action is taken.
Example Two: If there is an alteration to the build schedule, this may lead to a technical delay. The Security Trustee will take the advice of the monitoring surveyor, who will advise the best course of action to protect the investors' interests and profit potential.
How frequently will performance reviews of the Security Trustee be conducted?
Yearly
How will investor education about the Security Trustee's role be integrated into the onboarding process?
The Security Trustee agreement will be pre-designed and integrated into the onboarding documents and the role will be fixed based on the loan agreement, and security documents signed by investors with the developer.
What triggers will necessitate a review and update of the Security Trustee's role and responsibilities?
The Security Trustee can be removed from the role at 6 months' notice by the investors.
What tools or technological platforms are currently in use or considered for future use by the Security Trustee?
The Security Trustee will run personal or corporate credit searches on Experian.
Sanctions checks will be conducted on the Credit Safe platform.
PEP checks and negative media reports checks will be conducted on the World Check System of LSEG.
The livelihood checks, passport checks, and address checks will be conducted on the GBG portal.
How will the Security Trustee's interactions with other stakeholders be structured and managed?
Any update on the property and security will be communicated to the investors within 7 working days by the trustee. The trustee will maintain records of all such communication on cloud-based systems.
What is the plan for succession or temporary management in the event the current Security Trustee cannot continue their role?
The trustee will have a living will i.e. in case they are unable to discharge their duties then a well-known solicitor will cover their duties. In case the investors want to appoint another trustee, then the solicitor will transfer all the case files to the new trustee.
How will potential conflicts of interest between the Security Trustee and other stakeholders be identified and managed?
The trustee will have not any financial involvement with Trust Green or the Developer. They will only be paid by investors for their services, and that cost will be passed onto the Developer for payment.
What legal recourse do investors have in the event of a perceived failure by the Security Trustee?
The Security Trustee can be removed by the investors and a claim can be made under their professional indemnity.
What training and qualifications are required for individuals or teams acting as the Security Trustee?
The Security Trustee have professional experience in the real estate market. They will appoint a legal advisor to draft the security documents and other legal matters.
How will the Security Trustee ensure compliance with future regulatory changes?
The Security Trustee is acting on behalf of the investors as per the investor contract. If they are unable to act as trustees due to any future regulatory changes, then they will inform the investors well in advance.
What are the contingency plans for extreme market fluctuations or economic downturns?
The Security Trustee will seek the reports from Trust Green and make necessary recommendations to the investors. The risk of the economic downturn or loss of returns/ investments is with the investors.
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