We believe that Property Moose launched one of the first secondary trading platforms for property in the world at the end of October 2016 and has always cooperated with the regulators to ensure that this has continued to develop in line with changing views and requirements.
Over the last 15-months, to ensure the continued availability of service, we have spent significant time and money on developing the technology and putting in place the necessary legal and regulatory systems that underpin the system. We cannot overstate how complex, costly, and onerous this has been. As such, it is with much regret that the secondary market will be removed from the platform on 28th February 2018.
With the introduction of MiFID II and GDPR, and the uncertainty they bring in the regulatory sphere (not to mention the unknown impact of Brexit on our regulatory position and that of other financially regulated firms [MiFID II is an EU Directive]), it has become untenable to continue to offer the secondary market as a service without significantly increasing the fees payable by members.
We have held off on making this change for as long as possible and have so far absorbed the costs associated with running the service in the correct legal and regulatory framework.
Our compliance advisors have indicated that we may need to renew our current legal opinions on this matter, and the cost of this could run into several tens of thousands of pounds.
We believe that the increased fees that would be necessary to allow the continuation of the system cannot be justified. Passing on additional costs to members is not something we want to do as a business: indeed, we are focused on creating greater efficiencies so we can reduce fees, not increase them!
We are hopeful that the secondary market will return once there is more certainty around the relevant regulations, the impact of MiFID II, and Brexit’s impact on financial services. Until then, the choice to remove the secondary market aims to ensure that the vast majority of our members continue to enjoy the platform without increased costs.
As this is a big change for the longer term buy-to-let properties and the potential for mid-term liquidity, we want to allow investors in buy-to-let SPVs to start the exit process ahead of any initial projected terms. You can read more about that HERE.
To read about the exit process more generally, click HERE.