Overview of how the online secondaries feature works (two-party online secondary only)

The online secondaries feature allows you to execute a secondary transaction online with one seller and buyer (two-party transaction). Below gives you an overview of how it works.

Please note that the feature is currently limited to: 

  1. Company based in the UK with a Companies House registration number.
  2. Currently the currency supported for the transaction is GBP 
  3. The buyer and seller will need to reside in one of the following countries:
      • Belgium
      • Switzerland
      • Germany
      • Denmark
      • France
      • United Kingdom
      • Ireland
      • India
      • Norway
      • Sweden
      • Singapore
      • United States

    Step by step of how the feature works:

    1. Enabling the feature 
    2. Setting up the secondary transaction
    3. Seller side (to submit sales order form and sign power of attorney document)
    4. Buyer side (to submit purchase order form and sign power of attorney document)
    5. Issuer to clear the secondary transaction
    6. Issuer to sign share purchase agreement and stock transfer form
    7. Issuer to approve of the secondary transaction
    8. Uploading the stock transfer form (STF) and transfer published

    Please note that the fee for using online secondaries on Capdesk. There is 1.5% of the value of the sale, with a minimum of £15 or a maximum of £500 per seller.

    1) Enabling the feature

    Before you can use the feature, you will need to have the feature enabled, this includes:

    • Verified your ID and company ID
    • Use Capdesk as a shareholder register
    • Configured a signatory and approver for the transaction
    • Uploaded the relevant document templates (share purchase agreements and power of attorney for seller and buyer)Screenshot 2020-07-06 at 15.04.38

    You can find out more information on how to enable the feature here.

    2) Setting up the secondary transaction

    Once the feature is enabled, you can set up the two-party transaction:

    Screenshot 2020-07-06 at 15.06.09

    You will need to enter details of the buyer and seller and details of the secondary transaction including share price, share class, maximum number of shares able to sell, timelines and confirm that any rights of first refusal is handled.

    Screenshot 2020-07-06 at 15.22.25

    You can find out more information on how to set up the transaction here.

    3) Seller side (to submit sales order form and sign power of attorney document)

    The seller will then receive an email invite to sell their shares. 

    (Please note that if the seller wishes to sell their shares, they will need to verify their identity.)

    Screenshot 2020-07-06 at 15.34.00

    Screenshot 2020-07-06 at 15.35.36

    The seller will need to fill a sales order form, where the seller will need to enter their bank details and enter the minimum and maximum number of shares they wish to sell. After that, they are required to sign the Power of Attorney (PoA) document.

    Signing the PoA document will enable the secondaries approver to sign documents on behalf of the seller.

    Screenshot 2020-07-06 at 15.37.20

    The seller will have to enter these details prior to the “Sales Order Closing Date”, if they fail to do so the transaction will not progress.

    You can find out more information about the seller's experience here.

    4) Buyer side (to submit purchase order form and sign power of attorney document)

    Once the seller has completed their sales order and signing, the buyer will be invited to purchase some shares.

    The buyer will need to fill a purchase order form where they will need to add their bank account and enter the minimum and maximum amount of shares they are willing to purchase and sign the PoA document. Signing the PoA document will allow the secondaries approver to sign documents on behalf of the buyer.

    Screenshot 2020-07-08 at 15.06.08

    You can find more information about the buyer's experience here.

    5) Issuer to clear the secondary transaction

    Once the seller and buyer have expressed their interest for the secondary sale, the issuer (company) will “start clearing” the secondary transaction.

    Screenshot 2020-07-06 at 15.59.10

    You can find more information about how the issuer can start clearing here.

    6) Signing Share Purchase Agreement (SPA) and Stock Transfer Form (STF)

    The secondary approver (issuer) will then sign the share purchase agreement (SPA) and stock transfer form (STF) on behalf of the buyer and seller. 

    Screenshot 2020-07-06 at 16.00.52

    You can find more information on singing for forms here.

    7) Issuer to approve of the secondary transaction

    The secondaries approver (issuer) will need to click “Approve” to transfer the money from the buyer to the seller.

    Screenshot 2020-07-06 at 16.06.41

    You can find more information about approving secondaries here.

    8) Uploading the stock transfer form (STF)

    If there is a stock transfer to file (e.g. only if the amount is above 1000 GBP)  the status of the transaction will change to “Filing” and Capdesk will send the stock transfer form to HMRC. 

    Once HMRC sends a stamped form back to Capdesk (which can take up to 30 days), we will register this form on Capdesk.

    Screenshot 2020-07-10 at 09.26.47

    After this, the transaction is completed and will be recorded as “Published”. The stamped stock transfer form will be sent to the buyer so that the buyer retains the form.

     

    Screenshot 2020-07-06 at 16.13.18

    You can find more information about uploading the STF and publishing the transaction here.

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