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Going forward, Goji will not be issuing any further bonds in order to allow us to focus on our platform technology services. Our Diversified Lending Bond has outperformed our target net return of 5% on all matured bonds to date and performance in our live bonds is also currently above this target. If you have an investment with us we will manage it to maturity and the Investment Management team will continue to focus on outperforming our target return. Please contact us if you have any questions - you can access your account by logging in here


From 1 January 2014, the Capital Requirement Directive IV (“CRD”) and Alternative Investment Fund Managers (AIFMD) Directive (“the Directives”) established a revised regulatory capital framework governing the amount and nature of capital which credit institutions and investment firms must maintain. In the United Kingdom, the Directive has been implemented by the Financial Conduct Authority (“FCA”) in its Handbook of rules and guidance, including in particular in the Prudential Sourcebook for Investment Firms (“IFPRU”) and the Interim PrudentialSourcebook for Investment Business (“IPRU (INV)”).

The CRD framework consist of three ‘Pillars’:

  • Pillar 1

Pillar 1 sets out the minimum capital amount that meets the firm’s credit, market and operational risk.

  • Pillar 2

Pillar 2 requires firms to assess the risk exposures specific to their business and to calculate the amount of capital that should be held against those exposures. This has been implemented in the UK by the FCA as the Individual Capital Adequacy Assessment Process (“ICAAP”). FCA rules also establish a supervisory process for the FCA to challenge firms’ own assessments of their risk exposures and corresponding capital requirements. The amount of capital a firm is required to hold is the greater of the Pillar 1 and Pillar 2 values.

  • Pillar 3

Pillar 3 requires public disclosure of qualitative and quantitative information about the underlying risk management controls and capital position of a firm.


The AIFMD adds further capital requirements based on the Alternative Investment Fund (“AIF”) assets under management and professional liability risks.


The CRD sets out the provision for Pillar 3 disclosure. This document is designed to meet GFSL’s Pillar 3 obligations under Part Eight of the Capital Requirements Regulation (“CCR”) (part of CRD IV) by setting out the Firm’s risk management objectives and policies.

The Firm is permitted to omit required disclosures if it holds a genuine believe that the information is immaterial such that its omission or misstatement would not be likely to change or influence the assessment or decision of a reader relying on that information for the purpose of making economic decisions.

In addition, the Firm may omit required disclosures where it believes that the information is regarded as proprietary or confidential. In our view, proprietary information is that which, if it were shared with the public, would undermine our competitive position. Information is considered to be confidential where there are obligations biding us to confidentiality with our client, suppliers and counterparties.

The Firm has made no omissions on the grounds that information is proprietary or confidential.


Disclosures will be issued on an annual basis, at a minimum, and will be made available on GFSL’s website.


GFSL is registered and authorised with the FCA (FRN 805323) and is the only entity within the Goji group of companies to be authorised and regulated by the FCA. GFSL has adequate cash resources. Additional cash resources and financial support are available from Goji Holdings Limited GFSL’s sole shareholder, if required.


The Firm is governed by a Board of Directors who meet quarterly. The Directors delegate management control to the Firm’s Management Committee who meet on a weekly basis and have a formal standing agenda which includes enterprise wide issues and the risk appetite of the business. These meetings are the mechanism through which the Management Committee oversee (and is accountable for) the implementation of governance arrangements within the Firm and ensure its effective and prudent management. The broad constituency of the Management Committee reflects the due consideration to the appropriate and proportionate segregation of duties and the prevention of conflicts of interest.

The Firm considers that appropriate policies are in place to ensure the fitness and properness of all staff, including the members of the GFSL Board and Management Committee, who are all are experienced industry professionals. Any new senior appointments within the Firm are subject to the approval of both the Management Committee and the Firm’s Board of Directors and Goji Holdings Limited’s Board of Director’s with due consideration to the reputation, fitness and experience of the candidate as well as the long-term strategic goals targets of the business. All members of the Management Committee are full time (with the exception of the Head of Legal & Compliance) and have disclosed any outside business interests.

Initial and ongoing assessments of the competence of all staff are undertaken. In addition, all members of the Management Committee who are FCA approved persons are required to attest to their ongoing compliance with the fitness and properness obligations of the FCA approved persons’ process. All staff within the Firm undergo a programme of cyclical compliance training covering a variety of regulatory topics including financial crime and treating customers fairly.


The management information produced by the Firm’s enterprise risk management framework provides indicators to the Management Committee of the effectiveness of the systems and controls in place within the Firm to identify, monitor and manage risks arising in the business. The risk management framework is overseen by the Head of Legal & Compliance, with the Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and the Chief Technology Officer (“CTO”) assuming overall responsibility for its operation and setting the risk appetite of the firm. The Head of Compliance has responsibility for the implementation and enforcement of the Firm’s risk parameters defined by the CEO, CFO and CTO.

The Management Committee meet on a weekly basis and discuss current projections for profitability, cash flow, regulatory capital management, business planning and risk management. They engage with and mitigate the Firm’s risks though a framework of policy and procedures having regard to the relevant laws, standards, principles and rules (including FCA principles and rules) with the aim to operate a defined and transparent risk management framework. These policies and procedures are updated as required.

Management accounts demonstrate continued adequacy of the firm’s regulatory capital are reviewed on a regular basis. Appropriate action is taken where risks are identified which fall outside of the Firm’s tolerance levels or where the need for remedial action is required in respect of identified weaknesses in the firm’s mitigating controls.


When considering the details and analysis throughout the ICAAP and when running the business, the Firm has been and will continue to be cautious with regard to risks. The Firm has a low overall risk appetite. Specifically, it does not intend to take significant risk with its own capital and ensures that risk taken within the portfolios it manages are closely monitored. Any issues arising with the latter would not only affect clients but have an adverse impact on the Firm itself.

In practical terms, this low risk appetite means that whilst the Firm would be prepared to tolerate a degree of unexpected costs (and whilst a business can never be risk-free), it would not expect a material increase to the Firm’s cost base as expenditure is closely reviewed on a monthly basis. The Management Committee manages this through a policy of identifying, investigating and/ or resolving business events that impact the Firm’s profit and lossor the asset value of our clients according to the following materiality scale:

  • Market risk: UK GDP having a negative growth quarter
  • Interest risk: a change in interest rates by the Bank of England’s Monetary Policy Committee
  • Credit risk: an increase in bad debts seen in our investments of more than 25%
  • Operational risk: actual P&L expenditure varies from forecasts by more than 15%

It is important that a complete and thorough capture of all material risks occurs, and that the identification of material risks is not restricted by an assumption that a certain environment will prevail. In particular, it is important to consider distressed situations, as products may perform very differently under such environments. Management have given consideration as to what would make the business model unviable and whether systems and controls are in place to mitigate situations that would threaten the continued viability of the Group. The key risks identified fall into five categories:

  • Credit and counterparty risk
  • Market risk
  • Liquidity risk
  • Operational risk
  • Business risk

On an annual basis each member of the Management Committee reviews the risks, controls and other risk mitigation arrangements in their area of responsibility and assesses their effectiveness. The results of this review are shared with the Head of Compliance for inclusion in his annual risk report.


Credit and counterparty risk is the risk of loss relating to a credit event or counterparty failure.

The principal credit risk the Firm identifies in this regard is the failure of the lending partners the Firm invests with. The Firm currently invest through 7 lending partners. If any one of these lending partners were to fail it could cause reputational damage to the Firm. It could reasonably result in delays in investment capital being returned to it (depending on the administration process) which impact investor returns.

The Firm’s other key counterparty risk is with the key suppliers it uses for services critical to its operations. The Firm’s most critical counterparties Starling Bank because our cash execution, settlement, reconciliation and CASS process are integrated into their systems. A sudden loss of service from this counterparty would likely result in temporarily ceasing activity or being reliant on manual procedures increasing operational risk.


The primary risk faced by the Firm in this area is of a significant macroeconomic event that cause economic volatility and uncertainty resulting in reduced investment activity. The Firm ensures that it has sufficient capital and reserves to cover short term loss of profitability and in such an event, would take steps to reduce the cost base.

Notwithstanding the above, the Firm takes no market risk other than foreign exchange risk in respect of its accounts receivable and cash balances held in currencies other than GBP. No specific strategies are required or adopted in order to mitigate the risk of currency fluctuations.


Liquidity risk is financial risk due to uncertain liquidity. Liquidity crises occur as a result of inadequate or failed internal processes and/or systems in relation to monitoring and managing asset/liability profiles and related cash flows. The Management Committee considers that Liquidity Risk is of such importance to the stability of any business to warrant detailed consideration separate to that of Operational Risk.

The Firm’s policy is to maintain sufficient liquid funds to meet obligations as they fall due, or as needed in the event of an orderly wind down. An increase in expenses would only be agreed if coupled with an identified increase in cash income, or sufficient excess liquid capital to support any forecast negative cash flow. Such an increase would only arise as a result of formal business planning.

The Firm defines “liquid” as having instant access to funds (i.e. current bank accounts). The Firm defines “readily realisable” as other funds that can be realised within three working days without significant erosion of their carrying value to the business. The Firm’s liquidity policy determines the liquidity risk tolerance. A breach of the in-house policy would trigger the implementation of contingency funding arrangements.

The cash position of the Firm is monitored by the CFO on a monthly basis and who would be able to provide short term cash from the wider from if required.


Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events, including legal risk. The Management Committee include technology failure within this risk category, as much of what the Firm does uses our proprietary technology.

Operational controls are designed to ensure that there is little risk of errors occurring which would have a detrimental impact on the Firm and its clients. As new operational risks are identified within the business, appropriate controls are immediately put in place to mitigate these. Individual business lines are responsible for ensuring the operation and effectiveness of the controls they implement. The Management Committee provides oversight of the operational risk framework supported by a comprehensive compliance monitoring programme managed by the Head of Compliance. The frequency of compliance monitoring in respect of each area is determined by the significance of the risk and are reported to Management Committee.


Business risk is the risk of loss inherent in the business and the specific domains in which it operates.

The Firm considers its CEO, Jake Wombwell-Povey, to be pivotal to its growth ambitions and a loss of his services for any reason would likely reduce the Firm’s ability to generate new business at the level it forecast.

The Firm’s main product can be held within both an Individual Savings Account (“IFISA”) or Pension wrapper. These tax wrappers are subject to change and as a a change in this legislation would require immediate action from the Firm, we consider this to be a key operational and commercial risk.


As at 30th September 2018, the Firm’s Pillar 1 capital requirement was £112,500 as determined by its Fixed Overhead Requirement (‘FOR’). Capital Resources as at 30th September 2018 were £1,000,000 being Tier 1 Capital.

As reported at 30th September 2018:



As at 30th September 2018, the Firm has CET1 of £1m, giving it a CET ratio of:

Pillar 1: 791%

Pillar 2: 455%

The key factor driving Pillar 1 is our fixed overhead requirement (“FOR”). Historical actuals are reviewed on a monthly basis and forecasts on a quarterly basis. If there are no material variations on forecasts noted, Pillar 1 FOH is updated once a year based on year end accounts.

The key factors driving Pillar 2 are outlined in Section 6 (Risk) of this document. The largest single factor is deemed to be keyman risk on the loss of the CEO, Jake Wombwell-Povey.

The estimated cost of an orderly wind down is less than the calculated sum of the risks in the Pillar 2 calculation.


Having considered all the risks relevant to the Firm, the Management Committee believe that a total risk exposure is appropriate for the nature, scale and complexity of the Firm’s current activities and committed future plans and that the total risk exposure of the Firm is equal to its Pillar 1 and Pillar 2 exposures.

The Firm acknowledges the requirement to maintain adequate financial resources at all times in accordance with Principle 4 and IFPRU 2.2.1 R


Given the the Firm’s size and relatively low complexity there is no separate remuneration committee within the Firm. Decisions regarding remuneration are undertaken by the CEO, CFO, CTO with input from other members of the Management Committee.

The Firm is a Limited Liability Company with three Board Members who hold significant influence functions with the FCA and also form part of the Management Committee. The Firm has decided to treat all members of the Management Committee as Code Staff, on the basis that they impact the risk profile of the Firm.

The Firm has defined itself as a Proportionality Tier Four investment firm and adopted a proportioned approach to remuneration policy, dis-applying certain provisions where appropriate, in accordance with FCA guidance.


The Firm is authorised and regulated by the Financial Conduct Authority as an IFPRU Limited Licence Firm and, so, it is subject to FCA Rules on remuneration.  These are contained in the FCA’s Remuneration Codes located in the SYSC Sourcebook of the FCA’s Handbook.

The Firm’s overall policy is that the remuneration of senior managers and other staff whose actions have a material impact on the firm’s risk profile (“Code Staff”) should comply with the FCA’s Remuneration Code, with an appropriate balance being struck between financial performance and risk management. In particular:

  • A portion of the remuneration of Code Staff is variable based primarily on the Firm’s financial and service performance. In addition, the Firm considers each individual’s overall individual performance, using applicable criteria to motivate and reward success. However, the proportion of variable pay is limited, to ensure that it is feasible for no bonus to be paid in years where business performance does not merit this;
  • Personal reviews of Code Staff are carried out at least annually to assess their performance in meeting individual and strategic objectives. These reviews are reflected in compensation adjustments which take effect from 1 April each year as well as in awards of variable pay; and
  • No member of Code Staff is involved in deciding his or her own remuneration.

The policy in relation to the various elements of remuneration structures for Code Staff is set out below:

(a) Basic salary

Basic pay for all employees is market related thus ensuring a competitive salary that fairly reflects the market rate, skill, experience and expertise for the role. Individual development and progression is reflected through the annual salary and personal review processes.

(b) Variable pay

If applicable variable pay is comprised of year-end bonuses and/or a grant of EMI options. Year-end bonuses are awarded on the basis of overall job related performance and the attainment of established goals. Management gives significant weight to the Firm’s revenues and overall investment performance (on behalf of its clients) when determining the amount of such year-end bonus awards. Conversely, such policies are designed so that key investment personnel are paid lower compensation levels in years when the Firm does not perform as well on behalf of its clients.


The total aggregate remuneration attributable to Code Staff for the year ended 30th September 2018 was £565,000 made up entirely of basic salary.

We may omit required disclosures where we believe that the information could be regarded as prejudicial to the UK or other national transposition of Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data. We have made no omissions on the grounds of data protection.