JTC launches enhanced Escrow Services proposition to European market

Global professional services provider JTC has launched an enhanced Escrow Services proposition across the European market, having been granted a new licence under the EU’s Second Payment Services Directive (PSD2).

The new licence, issued by De Nederlandsche Bank – the central bank of the Netherlands – to JTC’s Netherlands operation, enables JTC to provide a comprehensive Escrow service that can be passported right across the European market to support both investment funds, public and private companies.

Working in conjunction with a network of major banks, the licence enables JTC to act as an independent and neutral escrow and settlement agent in major transactions, holding funds and assets safely on behalf of parties on both sides of a transaction. In particular, the new service includes wire transfer and deposit services in relation to M&A transactions, collection and distribution of investor commitments, litigation and arbitration awards and milestone-based transactions.

Complementing JTC’s existing broad range of international corporate and fund services, the new service will bolster in particular JTC’s ability to support core M&A activity across the EU market. As well as helping companies mitigate financial risk, particularly when a transaction may involve parties in different jurisdictions, the new service also provides an enhanced level of speed, accuracy and security when handling funds.

The Second Payment Services Directive (PSD2) entered into force in January 2016 and is a significant piece of legislation impacting the payments sector in Europe – including Escrow services. Its aim is to increase competition in the European payments market, bringing into scope new types of payment services and enhanced customer protection.

Commenting on the launch of the enhanced Escrow Services proposition, Dewi Habraken, Senior Director, Business Development, JTC, said:

“This new service has been launched in direct response to market demand, in order to meet the increasingly complex needs of companies and investment funds undertaking transactions in a sophisticated corporate environment. The risks inherent in the modern global M&A environment as well as shifting client requirements are meaning that using an independent, expert escrow agent is increasingly attractive.

“The fact that, through this new licence, we are now able to act as an independent agent for holding funds securely on behalf of parties on both sides of a transaction is a significant step for us that will enable us to deliver an enhanced level of holistic support to corporate and fund clients across Europe.”

Eke Verbeke, Managing Director – Netherlands, JTC, added:

“We already have significant strength in supporting corporate activity, in particular M&A work, through our expert Netherlands team. This new licence will help build on that and enable us to broaden our reach across Europe, drawing on the significant additional experience of colleagues across our European network. It can provide clients with the certainty they need when planning or undertaking M&A work, or counter party transactions where funds need to be held securely and distributed efficiently, securely or in stages, for example in real estate projects.”