Downing ONE VCT plc
LEI: 213800R88MRC4Y3OIW86
VCT rule changes and intention to publish a Supplementary Prospectus
21 December 2017
On 22 November 2017, as part of the Annual Budget, Her Majesty's Government published proposals for changes to the Venture Capital Trusts regulations
The proposed changes seek to focus future activity by VCTs on growth businesses where the investment carries a significant risk. Draft legislation has subsequently been published detailing a principles-based test which HMRC will apply to new VCT investments.
As this stage, it is not exactly clear of the impact of the new requirement, however it is likely that there will be less scope for the Company to make "income-focused" investments as set out in its Investment Policy. At this stage, the Board will review developments and will consider modifying the Company's Investment Policy in due course.
In the short term, the Board does not believe that the new regulations will have a significant impact on the risk profile of the portfolio as the Company has a significant proportion of its funds already invested.
The Company published a prospectus in respect of Offers for Subscription on 7 September 2017. In view of the rule changes announced, the Board intends to shortly publish a Supplementary Prospectus as they consider the changes may constitute a significant new factor for investors.