How does the secondary transaction work as a buyer

You will need to be invited to purchase some shares from the issuing company and this article explains what happens next.

The online secondary feature on Capdesk allows you, as a buyer, to purchase some shares from a seller (two-party). Read here for an overview of how it works.

Below is an overview of how it works for a buyer:

  1. You will need to login or sign up to Capdesk
  2. You will need to verify your identity
  3. Complete a purchase order form
  4. Sign Power of Attorney (PoA) document
  5. Fund the order

1. Log in or sign up to Capdesk

You will receive an email invite to invest in the company and there will be a link to sign up or log in to Capdesk.

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The email invite highlights an expiration date which lets you know how long you have until you can no longer purchase shares.

Before you can proceed to express your interest to purchase shares, you will need to verify your identity. 

2. Verify your identity

You can read more on how to verify here.

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3. Complete a purchase order form

Go to your portfolio and you will see a “Available for Purchase” heading then click on “Purchase Shares”.

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This will take you to a form to place your purchase order. There will be a brief description describing the secondary process. You are required to input bank details, and the number of shares you would like to buy.

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The bank details are important because once the secondary transaction order has been completed (including signing of transaction documents and approval of secondary), and your maximum desired shares is limited to the maximum allocated to sell, decided by the seller of the shares. We would still need the bank details for compliance. 

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We currently support IBAN and SWIFT/BIC. Choose your bank account's country of origin so we know which format to use.

Please note that you are subject to stamp duty if orders are over £1,000.

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Once you have inputted the details, you can click on the green “Place Order” button. 

4) Sign Power of Attorney (PoA) document 

After completing your order, you will be redirected to DocuSign, to sign the power of attorney document. 

Before you can sign the PoA, you will be asked to assign a witness as it is required to sign a deed.

To add a witness, click ‘Add New Witness’. You will then have to state their first name, last name and email address. Once done, click ‘Next’ (if a witness has already been recorded on your account then you can simply bypass this process and click on their name).


Once you have added a witness, you will see the following page. This means that you need to wait until the witness is available to sign the PoA.

Witness

By clicking ‘Next’, the witness will be invited to sign up to Capdesk via email and then they will need to navigate to their task section and will see a task asking them to “witness and sign” the PoA. Only once they have clicked the link will you be redirected to sign the PoA.

If you are ready to sign the PoA, click 'Continue'. If you wish to take a different action (eg. sign later, decline a.o.) you can do so by choosing the relevant option in 'More Options'.

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If you clicked continue, review the agreement to ensure all details are correct. Then click 'Start' on the left-hand-side. This will take you to the last page of the document, where you'll be required to add an electronic signature indicated by the yellow and red icon shown below:

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To sign, click on the icon. This will automatically offer you two options of a virtual signature to choose from. Click on the one you prefer and select "Adopt and Sign" to add it to the document.

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To finalise the signing, select the "Finish" button at the top of your screen.

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Once finished, the witness will be redirected to the PoA so that they can carry out the same process. 

5) Fund the order

After you and your witness have signed the power of attorney document, you will now need to fund the order.

Go back to the portfolio page, under the “Transactions in Progress” click on the action button “...” and “Fund Order”.

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From there you will be redirected to a page where it will detail the bank transfer and the whole money transferring process Shieldpay (who we are using as an escrow account) will go through: 

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As the buyer, you can navigate to the portfolio page and review your purchase order and the PoA by clicking on the “Transactions in Progress” tab and clicking on your purchase order: 

Once order is funded, you will have to wait until the company clears and approves. At this point money will be released, stock transfer form (STF) will be stamped and uploaded, and then the transactions will be published.

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The next steps would be to wait for the issuer to clear the secondary transaction and then Capdesk will send the STF to HMRC (stamping can take up to 30 days).

 

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Once we receive the stamped form back from HMRC and money is transferred, the secondary is settled and the transaction is published. We will also send the form to you by post.

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