About Our Services - Full DVP Escrow Services
Overview | Standard Transaction Documentation | Escrow Services
PipeFund’s escrow services facilitate closing PIPE and RD transactions in a better and more efficient manner. Although transaction participants may elect to utilize another escrow agent or no escrow agent at all, the PipeFund Standard Transaction Documentation is designed for a seamless, one-stop solution for executing and closing transactions using PipeFund escrow services. As opposed to other independent escrow agents, PipeFund will accept and hold the transaction securities in addition to holding the subscription funds or designating a reputable banking institution or law firm to hold such funds in coordination with PipeFund to enable a true seamless delivery-versus-payment (DVP) exchange at Closing. To engage PipeFund as escrow agent of funds and/or documents for your next transaction, please contact us.
Establishing and Using Escrow
Documents Escrow Agent
If PipeFund is engaged as Documents Escrow Agent, a 1-page Documents Escrow Agreement is entered into which incorporates all the terms and conditions contained in PST Document ESC-D (Standard Escrow Terms for Documents) available on the PST Documents tab above. For Registered Direct Offerings, since DWAC Settlement and DVP Settlement through DTC arrangements are typically provided, no Documents Escrow Agent is necessary.
Funds Escrow Agent*Following initiation of a PipeFund Transaction with PipeFund Escrow Services, PipeFund promptly arranges for the Issuer to engage either PipeFund or a reputable banking institution or law firm as Escrow Agent for accepting, holding and distributing subscription funds. An Escrow Agreement is entered into which incorporates or otherwise utilizes the terms and conditions contained in PST Document ESC (Standard Escrow Terms), so Investors can feel secure in funding the transaction at any time thereafter. In RD transactions in particular, PipeFund arranges cash escrow services with JPMorgan Chase Bank or another reputable banking institution or alternative escrow agent. PipeFund works closely in coordination with any contemplated Funds Escrow Agent designated by it or otherwise requested by the parties to effectively and efficiently complete the PipeFund Transaction. To the extent any base rate fees are paid directly to any such designated agent, such amount is deducted from the total price otherwise due PipeFund for escrow services.
Escrow Account*Upon engagement of PipeFund as Funds Escrow Agent in a PipeFund Transaction, PipeFund causes a unique, segregated Escrow Account to be established at JP Morgan Chase Bank for use in connection with the applicable transaction (or at another reputable bank if an alternative entity is designated as Funds Escrow Agent). The account name, account number and other pertinent details are promptly provided to transaction participants. Subject to applicable verification and approval, deposits to the Escrow Account can be made within hours of initiating the transaction, offering PipeFund participants the ability to establish an escrow account and execute a transaction within hours instead of weeks.
Benefits
Compared to traditional escrow arrangements (or no escrow), PipeFund’s superior escrow process is:
Faster
- With the form of Escrow Agreement pre-approved, there is no delay in arranging for the Escrow Agent.
- With an Escrow Agreement and Escrow Account in place within hours of initiating a PipeFund Transaction*, Investors can immediately make deposits into the account and know that their funds are safe and secure and will only be delivered upon consummation of the transaction and issuance and delivery of the securities. This further eliminates the need to be “on stand-by” to deliver a wire precisely at the time of Closing.
- With DVP, the Investors’ money remains in the Escrow Account until the final securities (or irrevocable Transfer Agent Instructions) are received by the Documents Escrow Agent and Closing occurs. With the subscription funds and closing documents held and released by the same independent agent or two agents acting in concert on a coordinated basis, there is better transaction integrity than separate entities handling these functions or worse, Investors funding a transaction and waiting in good faith for securities to be delivered.
- There is a simple, standard release procedure whereby the Issuer and a representative of the Investors submit a standard form of Joint Closing Instructions to the Escrow Agent for the release of the documents and funds as designated.
- It is more convenient for Investors to have the option of depositing funds into escrow in advance of Closing under a process they are familiar with, understand and trust.
- PipeFund’s rates for escrow services are comparable to or less than those of commercial banks and/or others effectively providing such services at an hourly rate. The difference is especially dramatic compared to those agents not offering DVP, in which precious time is misused on ministerial tasks more effectively handled by PipeFund.
* The acceptance by PipeFund (or other contemplated Funds Escrow Agent) of its appointment as Funds Escrow Agent, as well as the opening of any Escrow Account, is subject to applicable anti-money laundering, Office of Foreign Assets Control, and “know-your-client” verification and approval by PipeFund or such contemplated Funds Escrow Agent, which may be accepted or rejected in its sole discretion. For pre-approval, please contact PipeFund Escrow Services at (212) 676-5667 or escrow@pipefund.com to obtain applicable request forms.