Tax, Structuring, Financial advisory

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Tax Planning

DLT has generated new asset classes and structures that give rise to many complex situations that require review from top legal experts.


With nearly 2,000 cryptocurrencies being labelled as every asset under the Income Tax Act, limited guidance has been provided by tax authorities. The unique characteristics that cryptocurrencies and tokens possess  requires a case-by-case analysis to make an appropriate assessment. 


Add in the impending tokenization of real assets and the DLT tax landscape will certainly blur before it clears.

Structuring

Regulatory and tax uncertainties make structuring of funds and legal entities an important requirement. An issuer or investor generally won't be concerned about a currency, commodity or security being seized or over-taxed by regulators, but DLT assets are certainly at risk. 


Our international advisor network has intimate knowledge of these risks and can help mitigate them to acceptable levels for stakeholders.

Financial Advisory

Our vast breadth of financial advisory services extends to M&A, valuations, white paper support, restructuring, insolvency,  and forensic investigation services.

CAPITAL MARKETS

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Initial Coin / Token Offerings (ICOs & ITOs)

There were 886 ICOs & ITOs in the first 6 months of 2018. Comparing to IPOs, this has become a popular form of funding.


However, the lack of regulatory oversight and ease of launching an ICO have fostered a significant amount of fraudulent offerings.


The OSC has approved regulated ICOs and the SEC is also willing to work with issuers. We have experienced advisors available to help you successfully complete a compliant offering.

Third Party Disintermediation

Brokers, transfer agents, trustees, custodians, sub-custodians, clearing houses, collateral agents.... many trusted financial market intermediaries often seem 100 years behind. 


The recent move from 3 day settlement to 2 day settlement in many local financial markets was praised by many as a significant achievement. The reality is that the technology supporting our financial systems is so archaic and irreversible that this shift truly was a significant achievement.


But DLT is poised to disrupt these players and initial technology will provide cost-cutting opportunities alongside reduction of fraud and settlement risks.

Financial Institution Consulting

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Financial Institution Disruption

Where consensus is required among several parties, DLT's disruptive potential is obvious. For example, in syndicated lending arrangements, there could be 20 institutions or more involved in a single loan transaction, where the borrower only deals with an agent bank. Interest, break fees, draws, repayments, and balance reconciliations have a very significant administrative workload. With $8 trilllion in syndicated loans issued in 2017 alone, eliminating an agency bank via DLT would add significant value across corporate borrowers. Contrarily, a successful DLT implementation means institutions would need to offset lost income by reducing labour overhead accordingly.


In the new world of DLT where collaboration and decentralization are feverishly nurtured, major financial technology companies are racing to be first-movers in DLT syndicated lending and various other institutional products such as trade finance (letters of credit), collateral management, derivative settlements, trade confirmations, etc. This will undoubtedly create going concern issues at some businesses while spawning opportunities for startups and established companies alike, capitalizing on new services required by the new technology. 

KYC / AML

Standardization and collaboration will help FIs, corporations and individuals alike ease the often painful process of KYC and AML compliance. Even experienced personnel at Fortune 500 companies often cite spending 40+ hours to complete easy processes such as opening a bank account. 


Insufficient KYC and AML processes have cost financial institutions billions of dollars in fines. Large corporates often remain 'stuck' with a financial institution because the administrative burden to switch to another bank is prohibitive to the benefits.


In fact, sources estimate that AML and KYC compliance costs total nearly $100 billion per year