Legal and Regulatory Information

You have just accessed the website at www.jamesstocks.com and hosted by James Stocks & Co

Company name: James Stocks & Co Limited

VAT number: 213380345

Registered office: 5th Floor, 6 Agar Street, London WC2N 4HN

Telephone No: 020 3815 3290

Email address: info@jamesstocks.com

By accessing the www.jamesstocks.com website (the “Website”), you agree to be legally bound by the following terms and conditions.

Authorised by the Financial Conduct Authority with number: 739250

Investment Decisions

 The information contained in the Website is not intended to constitute any offer to sell or the invitation or solicitation of an offer to buy any service provided security by any company described or referred to in the Website (all such companies hereafter collectively referred to as the James Stocks Group and individually as “members” of the James Stocks Group) and must not be relied upon in connection with any investment decision.  You should rely solely on your own investigation regarding any investment decision and should seek competent professional advice.

Use of Website

 As a condition of your use of and access to the Website, you will not, directly or indirectly: (a) use the Website to infringe upon the intellectual property rights of the James Stocks Group; (b) use the Website or make any attempt to penetrate, modify or manipulate the Website to invade the privacy of any other user thereof; (c) attempt to modify, erase or damage any information contained on the Website or any device connected thereto; (d) reverse engineer any portion of the Website; (e) restrict or inhibit others from using the Website; (f) engage in conduct or distribute material that is harmful, obscene, otherwise illegal or objectionable, or gives rise to civil or criminal liability; (g) violate or attempt to violate the security or integrity of the Website.

No Warranty

 No member of the James Stocks Group (whether individually or collectively) gives any representation or warranty as to the accuracy, reliability, or completeness of the information contained in the Website (the “Information”) nor as to the appropriateness of the information for any use which any recipient may choose to make of it and accepts no responsibility for updating any part of the Information or for correcting any material error or omission which may become apparent after Information has been displayed on the Website.  Except insofar as liability under any statute cannot be excluded, no member of the James Stocks Group nor any of its and their directors, employees and consultants accept any liability (whether arising in contract, or tort, or negligence or otherwise) for any error, omission or misrepresentation in relation to the information or for any loss, damage, cost or expense (whether direct, indirect, consequential or otherwise) suffered by the recipient of this Information or any other person as a result of any use of or reliance upon any information or statement of any kind (including statements of fact or opinion) contained herein.

All content on the Website is provided “as is”, with no guarantees of completeness, accuracy or timeliness, and without representations, warranties or other contractual terms of any kind, express or implied.  No member of the James Stocks Group represents or warrants that the Website, any services provided through the Website, and/or any information or other material contained within or downloaded from the Website, will be accurate, current, uninterrupted, error-free, omission-free or free of viruses or other harmful components.

Copyright and trade mark protection

 The copyright and all other rights in all of the material on the Website are owned by the James Stocks Group.  No commercial use, resale or exploitation of material from the Website is permitted without the express written permission of the James Stocks Group.  You may copy material on the Website for your own private or domestic use only.  All other copying is prohibited.

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Indemnity of the James Stocks Group

 You agree to indemnify and hold the James Stocks Group harmless from any claim, demand, cause of action, debt, loss or liability, including reasonable attorneys’ fees, to the extent that such action is based upon, arises out of, or relates to your breach of these terms and conditions or your use of the Website.  This indemnity shall survive any termination of these terms and conditions.

Severability Clause

 To the extent that any provision of these terms and conditions is found by any competent court or authority to be invalid, unlawful or unenforceable in any jurisdiction, that provision shall be deemed not to be part of this disclaimer but such finding shall not affect the validity, lawfulness or enforceability of the remainder of these terms and conditions in that jurisdiction, nor shall it affect the validity, lawfulness or enforceability of these terms and conditions in any other jurisdiction.

Regulatory

 James Stocks & Co Limited, 5th Floor, 6 Agar Street, London WC2N 4HN.  Registered Number: 9306016.  James Stocks & Co Limited is authorised and regulated by the Financial Conduct Authority (number: 739250) for the provision of corporate finance services to professional clients and eligible counterparties.

PILLAR 3 DISCLOSURE

Introduction

James Stocks & Co (“JS&C” or the Firm) is required by the FCA to disclose information relating to the capital it holds and each material category of risk it faces in order to assist users of its accounts and to encourage market discipline.

With effect from 1 January 2014, the new Capital Requirements Directive (CRD IV) created a revised regulatory capital framework across Europe covering how much capital financial services firms must retain. The CRD IV framework is split between the previous Capital Requirements Directive (Directive 2013/36/EU) and the Capital Requirements Regulation ((“CRR”); Regulation (EU) No 575/2013). In the United Kingdom, rules and guidance are provided in the Prudential sourcebook for Investment Firms (“IFPRU”).

 The FCA framework consists of three “Pillars”:

  • Pillar 1 sets out the minimum capital requirements that companies need to retain to meet their credit, market and operational risk;
  • Pillar 2 requires companies to assess whether their Pillar 1 capital is adequate to meet their risks and is subject to annual review by the FCA;
  • Pillar 3 requires companies to develop a set of disclosures which will allow market participants to assess key information about its underlying risks, risk management controls and capital position. These disclosures are seen as complimentary to Pillar 1 and Pillar 2.

Articles 431 to 455 of the CRR sets out the provisions for Pillar 3 disclosure. The rules provide that companies may omit one or more of the required disclosures if such omission is regarded as immaterial. Information is considered material if its omission or misstatement could change or influence the decision of a user relying on the information. In addition, companies may also omit one or more of the required disclosures where such information is regarded as proprietary or confidential. The Firm believes that the disclosure of this document meets its obligation with respect to Pillar 3.

Firm Overview

 JS&C is incorporated in the UK and is authorised and regulated by the FCA as a Corporate Finance Firm.  JS&C’s activities give it the prudential categorisation of an IFPRU €50k Limited Licence firm.

JS&C is not part of a UK Consolidation Group. As such this Pillar 3 Disclosure has been produced on a solo basis.

The Governing Body of JS&C has the daily management and oversight responsibility.  It generally meets at least quarterly and is composed of:

  • Tim Stocks; and
  • Christopher Yates.

The Governing Body is responsible for the entire process of risk management, as well as forming its own opinion on the effectiveness of the process. In addition, the Board decides JS&C’s risk appetite or tolerance for risk and ensures that JS&C has implemented an effective, ongoing process to identify risks, to measure its potential impact and then to ensure that such risks are actively managed. The Governing Body and its senior management is responsible for designing, implementing and monitoring the process of risk management and implementing it into the day-to-day business activities of JS&C.

 In accordance with Article 435 of CRR, the table below shows the number of directorships held by members of the Governing Body as at the reporting date:

Name Position Number of other directorships Held
Tim Stocks Director 1
Christopher Yates Non-Executive Director 27

The Firm is satisfied that the Governing Body members have the necessary knowledge, skills and expertise to discharge their responsibilities effectively and that its systems and controls and processes are appropriate to ensure that any future recruited members will satisfy this requirement.  Further, the Firm’s recruitment policy complies with the UK legislation regarding the prevention of discrimination.

Due to the size of the Firm a separate Risk Committee has not been set up.

 Pillar 1 – Own Funds

As at the reporting date, on a solo basis the Firm’s regulatory capital resources comprised of the following:

Common Equity Tier 1 (“CET1”) £85,877
Additional Tier 1 Capital (“AT1”) £0
Tier 2 Capital (“T2”) £0
Total Capital £85,877

The Firm’s CET1 1 is made up of fully paid up share capital, share premium and audited reserves.

Pillar 1 – Own Fund Requirement

 As at the reporting date, the firm’s capital ratio is the higher of the following:

Base Capital Requirement of €50k £43,980
Sum of Credit Risk and Market Risk risk exposure amount (1250% weighting) £313,420
Fixed Overhead Requirement risk exposure amount (1250% weighting) £880,166
Capital Ratio £880,166

 

In line with Article 92 of the CRR the Firm must ensure that at all times it satisfies the following:

  • CET1 Capital is greater than 4.5% of its capital ratio (i.e. £39,607);
  • Total Tier 1 Capital (i.e. CET1 + AT1) is greater than 6% of its capital ratio (£52,810); and
  • Total Capital (i.e. CET1 + AT1 +T2) is greater than 8% of its capital ratio (£70,413).

Pillar 2

The Firm has adopted the “Structured” approach to the calculation of its Pillar 2 Minimum Capital Requirement as outlined in the Committee of European Banking Supervisors Paper, 27 March 2006 which takes the higher of Pillar 1 and 2 as the ICAAP capital requirement.  It has assessed Business Risks by modeling the effect on its capital planning forecasts and assessed Operational Risk by considering if Pillar 2 capital is required taking into account the adequacy of its mitigation.

Since the Firm’s Internal Capital Adequacy Assessment Process (ICAAP or Pillar 2) process has not identified capital to be held over and above the Pillar 1 requirement, the capital resources detailed above are considered adequate to continue to finance the Firm over the next year. No additional capital injections are considered necessary and the Firm expects to continue to be profitable.

 

 Risk Management

The Firm has established a risk management process in order to ensure that it has effective systems and controls in place to identify, monitor and manage risks arising in the business. The risk management process is overseen by the Firm’s Governing Body members.

As risks are identified within the business, appropriate controls are put in place to mitigate these and compliance with them is monitored on a regular basis. The frequency of monitoring in respect of each risk area is determined by the significance of the risk. The Firm does not intend to take any risks with its own capital and ensures that risk taken within the portfolios that it provides advice to is closely monitored. The results of the compliance monitoring performed is reported to the Governing Body by the Compliance Officer.

Operational Risk

 The Firm places strong reliance on the operational procedures and controls that it has in place in order to mitigate risk and seeks to ensure that all personnel are aware of their responsibilities in this respect.

The Firm has identified a number of key operational risks. These relate to disruption of the office facilities, system failures and failure of third party service providers. Appropriate policies are in place to mitigate against risks, including appropriate insurance policies and business continuity plans.

Credit Risk

The main credit risk to which the Firm is exposed is in respect to the failure of its debtors to meet their contractual obligations. The majority of the Firm’s receivable is related to corporate finance advisory activities.  The Firm believes its credit risk exposure is limited since the Firm’s revenue is ultimately related to advisory fees received from its client. These fees are received throughout the year/ on the success of a transaction. Other credit exposures include bank deposits and office rental deposits.

The Firm undertakes periodic impairment reviews of its receivables. All amounts due to the Firm are current and none have been overdue during the year. As such, due to the low risk of non-payment from its counterparties, management is of the opinion that no provision is necessary. A financial asset is overdue when the counterparty has failed to make a payment when contractually due. Impairment is defined as a reduction in the recoverable amount of a fixed asset or goodwill below its carrying amount.

The Firm has adopted the approach to credit risk set out in Article 112 of the CRR. The Firm applies a credit risk capital component of 8% to its non-trading book risk weighted exposure. As the Firm does not make use of an external credit rating agency, it is obligated to use a risk weight of 100% to all non-trading book credit exposures, except cash and cash equivalents which are held by investment grade firms and currently attract a risk weighting of 20%.

The table below sets forth the Firm’s credit exposures and corresponding capital resource requirements as at the reporting date:

Solo Basis Credit Exposure Risk Weighted Exposure
Fixed Assets £101,195 £101,195
Tangible fixed assets £0 £0
Due from affiliates – within 3 months £86,234 £86,234
Due from affiliates – after 3 months £0 £0
Cash at bank £11,152 £2,230
Prepayments £0 £0
Other £123,761 £123,761
————— ————
Total £322,342 £313,420
========= =======
Credit Risk Capital Component (8% of risk weighted exposure) £25,074

Market Risk

 Since the Firm holds no trading book positions on its own account, and all bank accounts are in GBP and all advisory fee income is in GBP, the Firm’s exposure to foreign currency risk is not significant. Since the settlement of debtor balances take place without undue delay, the timing of the amount becoming payable and subsequently being paid is such that it is not considered to present a material risk to the Firm. The Firm has excluded Market risk on the basis that it is not a material risk to the Firm.

 Remuneration Code

The Firm has adopted a remuneration policy and procedures that comply with the requirements of chapter 19A of the FCA’s Senior Management Arrangements, Systems and Controls Sourcebook (SYSC), as interpreted in accordance with the FCA’s guidance publication entitled “General Guidance on Proportionality: The IFPRU Remuneration Code (SYSC 19A)” and subsequent items of guidance issued by the FCA, including its document entitled “Frequently Asked Questions on the Remuneration Code”.

As an IFPRU limited licence firm, the Firm falls within proportionality level 3. The Firm has concluded, on the basis of its size and the nature, scale and complexity of its legal structure and business that it does not need to appoint a remuneration committee. Instead, the Governing Body sets, and oversees compliance with, the Firm’s remuneration policy including reviewing the terms of the policy at least annually.

As at the reporting date, the Firm has set the variable remuneration of its directors and staff in a manner which takes into account directors, staff and firm performance, by reference to individual performance, performance of the Firm. As permitted for firms falling within proportionality level 3, the Firm takes into account the specific nature of its own activities (including the fee based nature of its revenues) in conducting any ex-ante risk adjustments to awards of variable remuneration and, given the nature of its business, has disapplied the requirement under the Remuneration Code to make ex-post risk adjustments.

In accordance with SYSC, the Firm makes the following disclosures:

Business Area Total Remuneration Per Business Area
Corporate Finance Advisory £216,000
Total £216,000

 Code Staff Remuneration

Senior management and members of staff whose actions have a material impact on the risk profile of the Firm are classified as Code Staff. The below table shows the number of Code Staff in each business area.

Business Area Number of Code Staff
Senior Management 2
Other Code Staff 1
Total 3
Total Fixed Remuneration of Code Staff £180,000
Total Variable Remuneration of Code Staff £0
James Stocks & Co Limited registered office: 5th Floor, 6 Agar Street, London WC2N 4HN. Registered in England and Wales Number 9306016.
James Stocks & Co Limited is authorised and regulated by the Financial Conduct Authority Number 739250.

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