Our fastest onboarding was completed within 24 hours, though on average, the process may take a little longer. If needed, we can expedite the process. However, under normal circumstances, we aim to complete onboarding within two weeks.

No, from the user’s perspective, this process is identical to placing a standard unsecured cash deposit, where the user receives interest and the original principal at the end of the deposit term. Consort1 handles the custody of the collateral as part of the service, acting as the regulated Repo nominee through one of the global custodians, such as Clearstream or J.P. Morgan.

The release of collateral would typically be triggered within 48 hours of the default event. The sale of the collateral would be arranged as swiftly as possible in the open market.

No, you are not exposed to the collateral securities unless the bank defaults and the collateral release and sale process is triggered. As an SDS secured depositor, you won’t experience any capital gains or losses, nor will you receive any dividends or coupons from the collateral. In the event of a bank default, the collateral is sold as quickly as possible, and the proceeds, up to the amount owed, are returned to you in cash.

Yes, you have full control over all aspects of your secured deposit, including the amount, currency, duration, bank, and collateral. You can choose from the options currently supported by Consort1, or you can request new options, such as adding a different bank, a new collateral basket, or a new currency (GBP, USD, and EUR are already supported). Consort1 is here to assist you, and never has any discretion over your cash.

While we would generally expect SDS secured deposits collateralised with UK Gilts or other government bonds to result in excess collateral following a bank default (as was Restricted Access the case in 2008), lower-quality collateral may decrease in value between the time of. release and sale, which poses a risk that the full amount may not be recovered. However, most banks provide a risk margin for lower-quality collateral, ensuring that the collateral exceeds 100% of the cash deposit.

In the rare event that the collateral is still insufficient, the secured deposit client would claim the difference alongside other creditors and unsecured depositors. Despite this, the secured depositor benefits in several ways:

1. By earning a higher interest rate during the deposit term.
2. By receiving partial recovery through the collateral.
3. By avoiding the risk of any bail-ins, where unsecured deposits can beretained during a bank’s financial difficulties.

Ultimately, it is hard to imagine a scenario where any form of SDS secured deposit collateral, regardless of its quality, would present a higher risk compared to an unsecured cash deposit with the same bank.

Yes, fees are agreed upfront, and we adhere to a policy of complete transparency—there are no hidden charges. There are no fees for setup or ongoing maintenance; fees only apply when SDS secured deposits are arranged. All rates are quoted net of pre-agreed fees. Typically, the net rates for an SDS secured deposit are higher than those for unsecured deposits over the same period, depending on the collateral you select.

Yes, collateralising the deposit greatly reduces the financial risk in the event of a counterparty default. This allows you to consider placing funds with additional counterparties on a secured basis.

SDS secured deposits are considered ‘over-the-counter,’ so each counterparty bank will price deposits differently based on factors like collateral availability, credit spreads, and funding appetite. Banks often have a strong appetite for shorter-dated cash or Gilt secured deposits due to their liquidity benefits. As a result, we generally expect shorter tenors to be attractive to banks, with net rates that are competitive, if not higher, than those for unsecured deposits across all time periods.

Secured deposits are generally more attractive to banks due to the liquidity and balance sheet benefits they provide, making the cash more valuable to the bank compared to unsecured deposits. This creates a win-win situation for both the bank and the secured depositor. Additionally, banks value depositor diversification and are eager to support Consort1, which allows a broader range of clients, who normally would not have access to the Repo market, to place secured deposits. Consort1 was specifically established, with major bank support, to remove the barriers that prevent unsecured cash depositors from placing cash on a secured basis.

The £10m is a soft minimum, and we do have banks that are willing to accept £5m, or even less in some cases, although this would be with selected banks. Additionally, we offer options to aggregate multiple smaller deposits to meet a bank’s minimum trade threshold. If you’re interested in this, please reach out to us and we’ll explore the available options with you.

No, as Consort1 merely facilitates assets and contractual obligations and is not a principal party to any transactions, the client’s cash and assets remain separate from the Consort1 balance sheet. In the unlikely event of an unexpected liquidation during an ongoing transaction, the liquidators would use Consort1’s books and records to verify the rightful ownership of the assets, ensuring that the client receives the full proceeds (principal and interest) upon maturity.

Furthermore, a more likely scenario leading to a potential liquidation would be are gulatory capital breach (“ANLA”), which would trigger a reportable event. This would occur well in advance of any liquidation, allowing operational protections to be implemented. Provisions would be made to ensure clients continue to receive their maturing proceeds as scheduled.

ANLA, or Adjusted Net Liquid Assets, is a key regulatory concept used by the JerseyFinancial Services Commission (“JFSC”) to ensure that regulated entities, such as trust companies and investment firms (including Consort1), maintain adequate liquidity and financial stability.

Under the JFSC’s regulatory framework, firms are required to maintain a minimum level ofANLA to ensure that they have sufficient liquid assets to meet their obligations over a 12-month period. The ANLA calculation adjusts a company’s net assets by removing illiquid or non-qualifying assets (such as intangible assets or long-term investments) and focusing on those that can quickly be converted into cash or cash equivalents.

Maintaining an adequate ANLA is a crucial part of meeting regulatory capital requirements and helps protect clients and the financial system by ensuring firms can continue operating even in times of financial stress. If a firm’s ANLA falls below the required threshold, it may face increased scrutiny or be required to take corrective measures to restore liquidity, which could include reporting the breach to the JFSC.

This framework is designed to mitigate risks related to liquidity shortfalls and potential insolvency, ensuring that companies can cover their liabilities and meet client obligations without relying on illiquid assets.

For our existing banks, we anticipate the year-end accounting treatment to be identical to a standard unsecured cash deposit. The collateral remains unreleased unless a default occurs, so the accounting is straightforward.