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Car parking scheme under fire over investor buy-back deal after FCA action

An unauthorised car parking scheme that closed after discussions with the FCA has been criticsed over a “clumsy” offer for investors to buy-back their spaces early.

Last month, the FCA ruled that some of Park First Limited’s schemes met the regulatory definition of a collective investment, so should have only been operated or promoted by authorised firms. However, Park First was unregulated.

In documents seen by Money Marketing, in which Park First describes itself as an “innovative secure property investment”, the company says because of the FCA’s ruling, it has had to change the structure of its investment.

It is offering investors the option to either enter into a new lifetime leaseback arrangement, or to sell back their space under an early buy-back option.

The leaseback, which grants shares in a Park First management company, offers investors a fixed 2 per cent annual yield plus variable dividends from the management company’s profits.

However, investors wanting immediate exit will have to wait six months to have their investment returned, and could wait as long as a year. Park First will deduct the rental income it paid to investors from the repayment, and investors may also receive less interest if they wait more than 60 days to accept the buy-back offer.

An investor tells Money Marketing: “I think for the FCA to deem this as a collective investment, and them just let Park First walk away by making a rather clumsy and unpalatable offer of their lifetime lease back scheme is deplorable.

“I have decided to take their buy-back offer, however this offer has many strings attached, like any usage payments would need to be paid back, and that you need to hand back title to the spaces to Park First, which then has a year to sell them. All in all, a great piece of leg work by Park First to make as much out of this as possible.

“I called the FCA, who just quoted their statement, an absolutely toothless organisation, taking the easy option out.”

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Comments

There are 13 comments at the moment, we would love to hear your opinion too.

  1. I assume the disgruntled investor means Group First, the parent company of Store First and Park First, not First Group, the well-known bus and train company.

    • MM has now corrected the article and posted the usual effusive thanks to the BTL readership for doing the sub-editor’s job, and an acknowledgement of the correction so BTL readers commenting on the error don’t look silly. Two of those things are not true.

  2. […] Marketing has now seen details of the new investment and reports that it “offers investors a fixed 2 per cent annual yield plus variable dividends […]

  3. If investors get their money back that has to be a positive outcome. In most cases investors lose most if not all of their money.

  4. I don’t really see why the FCA has involved itself here. Surely leaving it as an unregulated entity and ensuring regulated firms just don’t get involved has to be a better outcome.

    The next move will be regulating the purchase of houses and if misguided people lose money then hey, let them claim on the FSCS.

    Caveat emptor – fools and their money, etc.

    • I really hope you are not an authorised adviser.

      “Surely leaving it as an unregulated entity and ensuring regulated firms just don’t get involved has to be a better outcome”

    • “I don’t really see why the FCA has involved itself here. Surely leaving it as an unregulated entity and ensuring regulated firms just don’t get involved has to be a better outcome.”

      The former is what the FCA has done. Prior to FCA intervention, Park First was acting as a regulated entity by operating a collective investment scheme – without actually being regulated. Now that the FCA has put a stop to that, it can carry on as an unregulated entity doing its unregulated thing.

      The FCA has very little power to stop regulated advisers from recommending unregulated investments.

  5. Good old Toby Whittaker again. What a gem of a bloke.

  6. Justinside – I assume you are not hence not your real name!

  7. Why dont the FCA regulate all investments? It would means that the missold SIPP investments to low networth clients, in unregulated Park First, Store Pods , Green oil , overseas property etc., by non qualified so called advisers can be prosecuted and in some cases jailed for the loss and distress caused to the clients by their fraudulent advice.

    • This is what the SEC does in the United States. In the US Park First’s “8% guaranteed in the first two years” would be a securities offering and would have to be registered with the SEC. If they didn’t, the SEC would be able to issue a cease and desist.

      However we can’t have that in the UK because the regulator is too busy ensuring that every financial firm under the sun is complying with PRIIPs requirements and disclosing all their charges in pounds and pence, percentages, and quantum superpositions.

    • “Why dont the FCA regulate all investments?”

      Well, a good starting point for an answer is to sit down and write a definition of what an investment is. Come back in a couple of years when you’ve got a draft that you can get someone else to agree with 100%, and we’ll no doubt be able to give you a few hundred reasons why you didn’t get it right.

      • How about “any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of de-
        posit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value
        thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a ‘‘security’’, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing”?

        That definition’s seemed to work quite well since it was enshrined in the Securities Act 1933.

        The SEC manages to stop offerings like Park First reaching the general public without getting bogged down in philosophical discussions.

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