How to set up a secondary transaction

Once you have enabled the secondary feature, you can set up a secondary transaction (two-party only) and this article tells you how.

After you have enabled the secondaries feature, we can set up a secondary transaction (two-party only). If you have not done so, you can read more on how to enable the feature here.

To begin, go to Online Secondaries page (under Ownership) -> Add Online Secondary (green button) -> Add Two-Party Online Secondary.

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You will need to select the seller who wants to sell their shares.

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Once the seller is selected, you can either select an existing shareholder as the buyer or enter details of a new buyer. 

If the buyer is already a stakeholder in the company, then they will appear in the ‘Select Buyer’ list as their details are already recorded on Capdesk. If the buyer is not a current stakeholder, click ‘Or Add A New Buyer Instead’.

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Adding a new buyer, you will need to fill in information of the buyer i.e if the buyer is a person or a company, the buyer’s name and the relevant contact details. Once completed, click ‘Next’.

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Now that the buyer and the seller have been chosen, details of the online secondary transaction and timeline needs to be inputted.


For ‘Secondary Details:

1) Name - A short name to easily identify the secondary transaction

2) Secondary Document Template - Select the Share Purchase Agreement (SPA) previously uploaded to Capdesk

3) Share Class - Only shares of the chosen class can be bought and sold

4) Price Currency - Secondary transactions are to be completed with pound sterling only. This field will be automatically filled by default

5) Price Per Share - The cost of a share sold in the secondary transaction

6) Max. Number of Shares Allowed to Sell - Maximum amount of shares that the shareholder can put up for sale. Details of the total amount of shares available to be sold is also highlighted

For ‘Timeline’:

1) Sales Order Closing Date - Deadline for the seller to express the amount of shares they are willing to sell

2) Purchase Order Closing Date - Deadline for the buyer to express how many shares they wish to purchase

Please note that these deadlines do not overlap. This means that during the sales order window, the seller is invited to place their sales order and the buyer is not invited to place their purchase order. The buyer will only be invited to do so once the sales order is completed.

3) Clearing Date - The day when the issuer clears the secondary transaction and is required to sign relevant documents (share purchase agreement (SPA) and stock transfer form (STF)) and approve of the transaction

4) Settlement Date - This is the date of when the transaction is settled, funds transferred and will have the STF received back from HMRC. This date is generated by Capdesk and is dependent on the filing requirements. If the transaction is in the UK and it is above 1000GBP then we calculate 30 days for STF handling. Otherwise, without STF handling, we calculate 10 days.

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The final part of the configuration is to confirm that any rights of first refusal have been handled before the secondary begins. If this is the case, simply tick the box to confirm and then click ‘Save Draft’ at the bottom of the page.

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Now that the secondary has been saved as a draft, it will appear in the Online Secondaries list.

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If you would like to review the secondary, click on the name of the transaction and you will be taken to the ‘Secondary’ page where you will be able to review all of the details.

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If you click on either the sellers or buyers tab, you will see that both have a draft status. This is to resemble that the secondary transaction is in draft. As the secondary transaction progresses, these status' will update accordingly.

If you are happy with all the details, you can publish the secondary transaction. To do this, go back to the online secondaries list -> click on the action button (3 dots) -> Publish.

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The status will now change from ‘Draft’ to ‘In Progress Participants Placing Orders’.

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Now that the transaction has been published, by clicking on the name of the transaction, you will see that the timeline has updated from draft to published.

Additionally, by clicking on the sellers tab, you will see that the status has changed from draft to invited.

The next step is for the seller to complete their part of the transaction. You can find out more here.

If you need further assistance, you can reach out to us by submitting a support ticket here.