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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


The European Capital Requirement (“CRD”) and Alternative Investment Fund Management (AIFMD) Directives (“the Directives”) establishes a revised regulatory capital framework across Europe 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 FCA in its Handbook of rules and guidance, including in particular in the Prudential Sourcebook for Investment Firms (“IFPRU”) and the Interim Prudential Sourcebook for Investment Business (“IPRU (INV)”).

The CRD Directive’s framework consist of three ‘Pillars’:

  • Pillar 1

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

  • Pillar 2

Requires the firm to assess whether its capital is adequate to meet its risk that are not covered by Pillar 1 and is subject to review by the FCA.

  • 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 set out the provision for Pillar 3 disclosure. This document is designed to meet GFSL’s (‘the Firm”’) Pillar 3 obligations under Part Eight of the CRR 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 binding us to confidentiality with our client, suppliers and counterparties.

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

Frequency and location of disclosure

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 FCA registered. GFSL has adequate cash resources and alternative cash resources and financial support are available from Goji Holdings Limited if required.


The Firm is governed by a Board of Directors who meet monthly 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 Board oversee (and is accountable for) the implementation of governance arrangements within the Firm and ensure its effective and prudent management. The constituency of the Board 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, who are all are experienced industry professionals. Any new senior appointments within the Firm are subject to the approval of both the Board and Goji Holding Board 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 Board are full time 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 Board 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 Board 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 Operations, with the Chief Executive Officer, Chief Financial Officer and Chief Commercial Officer responsible for its operations and setting the risk appetite of the firm. The Chief Executive Officer has responsibility for the implementation and enforcement of the Firm’s risk parameters.

The Board meet on a regular 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 demonstrating 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. 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 Board manages this through a policy of identifying, investigating and/ or resolving business events that impact the Firm’s profit and loss or the asset value of our clients according to the following materiality scale:

  • Market risk: UK GDP having two consecutive quarters of negative growth
  • 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 20%

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 Board 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 their annual risk report.


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

The key counterparty risk is with the key suppliers it uses for services critical to its operations. The largest counterparty for the Firm is Starling Bank, as our automated cash execution, settlement, reconciliation and CASS process are built into their systems by API. 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 principal investment credit risk of the Firm relating to legacy investment management services is the failure of a lending partner, through whom the Firm invests. If one of our 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 may impact investor returns.


The primary risk faced by the Firm in this area is of a significant macroeconomic event that causes economic volatility and uncertainty resulting in reduced investment activity. The Firm ensures 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 Board 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 Board include technology failure within this risk category, as much of what the Firm does uses our proprietary technology.

Operational controls are designed to ensure 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 Board 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 Board.


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

The Board considers there will be short term disruption for the loss of a staff member, however the Board is confident in the strength and quality of the wider group management team and does not consider there to be a material medium or long term key risk relating to any single member of the Board.

The Firm’s principal platform services relate to alternative investment managers. Some of these products are eligible for the Innovative Finance Individual Savings Account (“IFISA”) tax wrapper or the Enterprise Investment Scheme (“EIS”). A change in legislation relating to tax wrappers and schemes impacting the alternative investment industry would require immediate action from the Firm to ensure its investors are clear on how this impacts them and their investments.


As at 30th September 2019, the Firm’s Pillar 1 capital requirement was £106,250 as determined by its base own funds requirement. Capital Resources as at 30th September 2019 were £788,037 being Tier 1 Capital.

Key factors driving the Group’s regulatory capital position

The key factor driving Pillar 1 is our base own funds.

The key factors driving Pillar 2 are outlined in the Risk section of this document. The board considers Pillar 2 risks to represent an incremental risk exposure to Pillar 1 of 110%.

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 Board 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 Firm’s size and relatively low complexity there is no separate remuneration committee within the Firm. Decisions regarding remuneration are undertaken by the Chief Executive Officer, Chief Financial Officer, and Chief Commercial Officer.

The Firm is a Limited Company with three Board Members who hold significant influence functions with the FCA. The Firm has decided to treat all members of the Board 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 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 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

No staff receive bonuses or variable pay


The total aggregate remuneration attributable to Code Staff for the year ended 30th September 2019 was £175,642 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.