Audley Funding 12% 27/02/2022 – GB00BDFBS041
The ISA rules do require the securities to be issued by a ‘company’ which is defined in the ISA regulations as a ‘corporate body with share capital’. It appears quite common for firms to set up separate companies to carry out this kind of debt security and these are typically referred to as Special Purpose Vehicles (SPVs). Although it can be sometimes difficult to establish the precise legal status of such vehicles, the ones we have seen in the past did seem to have been established as ‘companies’ so we are usually happy that they did meet the ISA definition of a ‘company’.
Having said that, it appears that some SPVs may be set up as limited partnerships or trust which then means that the SPV may not meet the definition of a company. When we have corresponded with HMRC in the past to seek their view as to whether an organisation (partnerships or trusts) meet the definition of a ‘company’, they have deflected this decision back to the ISA manager i.e.. they weren’t willing to make a call on this (In other words, it’s left up to the ISA manager).
You would need to satisfy yourself that the SPVs used to carry out the issue of these securities do meet the definition of a ‘company’ (i.e.. corporate body with share capital). Initial checks at Company House suggest that Audley Funding plc would meet the definition of a ‘company’ for ISA purposes.
Having satisfied yourself that the securities are being issued by a ‘company’, it is then just a case of carrying out the usual ISA ‘qualifying securities’ checks to see if they are ISA eligible. So is the security itself or the shares in the issuing company either listed on a recognised stock exchange or admitted to trading on a recognised stock exchange in the EEA or the UK.
The only information I could find is the London Stock Exchange (LSE) links below which seem to suggest that, prior to maturity, this was a listed security on the LSE meaning that it would have been ISA qualifying.
What is a Special Purpose Vehicle (SPV)?
A Special Purpose Vehicle (SPV) is a separate legal entity created by an organization. The SPV is a distinct company with its own assets and liabilities, as well as its own legal status. Usually, they are created for a specific objective, often to isolate financial risk. As it is a separate legal entity, if the parent company goes bankrupt, the special purpose vehicle can carry on