What is a non-readily realisable security?
The Financial Conduct Authority (FCA) created the term ‘non-readily realisable security’ in 2014 to describe certain types of investments which are difficult to price and for which there is no or only a limited secondary market. These are primarily equity or debt securities of small and medium enterprises which are longer-term investments and carry more risk of capital loss.
Examples of instruments which are considered ‘readily realisable’ include:
- government instruments issued in their local currency
- a security (e.g. shares or bonds) admitted to official listing on a recognised stock exchange in the EEA or recognised investment exchange elsewhere in the world
- personal investment products such as unit trusts, investment trusts, personal pension schemes
- shares issued in mutual societies or credit unions
Since investments you may have made via the Funderbeam platform do not fall into the above examples, they would be considered ‘non-readily realisable securities’.
You can review the full definition on the FCA’s website here: https://www.handbook.fca.org.uk/handbook/glossary/G3363.html