M&A to Litigation: Dewi Habraken on Versatile Escrow Solutions

It has been just over a year since JTC launched its enhanced Escrow Services proposition across the European market, having been granted a new licence under the EU’s Second Payment Services Directive (PSD2).

Dewi Habraken, Senior Director – Institutional Capital Services, answers some of the questions that are often asked of escrow transactions.

Q: Why have escrow services become so vital to corporate and commercial transactions in recent years?

A: Escrow services are essential in today’s business landscape because they offer protection for both buyers and sellers against risk. Increased regulation, a higher number of cross-border transactions, and more frequent litigation all demand a process where funds and assets are managed securely until all conditions agreed to in contracts are met. In mergers and acquisitions, real estate, and other high-value deals, using an independent agent ensures that contractual terms are honoured, and deals move ahead with confidence.

Q: What is the fundamental role of an escrow provider in such transactions?

A: The escrow provider acts as a trusted independent intermediary. We hold assets, typically cash, ensuring nothing changes hands until every aspect of the agreement is satisfied. This fosters trust and enables complex transactions to proceed, often between parties that have never worked together before or are operating across jurisdictions with different regulatory needs.

Q: Can you illustrate typical scenarios where escrow services make a difference?

A: Certainly. Most commonly, you’ll find escrow agreements in M&A transactions, where funds are set aside to cover future claims or purchase price adjustments. In fundraising, escrow protects investors until capital raise requirements are met. For international business, escrow addresses the complexity of varying regulations and currency exchanges. Escrow in combination with Paying Agent services are also used for sensitive intellectual property transfers and to hold settlement funds in litigation, ensuring that all parties are protected and that funds only move once legal requirements are met.

Q: What defines a corporate escrow agreement, and how is risk mitigated?

A: A corporate escrow agreement is a legal arrangement where a neutral agent holds assets until all parties meet the conditions set out in the contract. This framework dramatically reduces counterparty, and compliance risks and provides the security needed for businesses to proceed with large transactions.

Q: Financial regulation is increasingly complex. How do your escrow solutions stay compliant?

A: Compliance is fundamental. Our escrow services are designed to meet the requirements of international regulatory standards. We follow strict capital requirement rules, deploy robust verification and cybersecurity measures, and our licensing ensures transparency and oversight. This reassures clients that transactions will be handled securely and in full accordance with regulatory expectations.

Q: What is the difference between an escrow agent and a paying agent?

A: Both roles go hand in hand, a paying agent distributes funds as directed whereas an escrow agent holds assets until all the contractual conditions are met – only then is the release authorised.

Both roles are crucial in complex financial transactions but serve different purposes. JTC provides both.

Q: How do you ensure funds are released from escrow efficiently yet securely?

A: When all requirements are fulfilled and parties have authorised the release, our processes—integrating verification and pre-set settlement instructions—enable immediate disbursement. We work across multiple jurisdictions, currencies, and banks, using secure protocols to ensure everything is both compliant and efficient.

Q: What should companies look for when selecting an escrow provider?

A: Companies must look for providers that are able to move with speed while holding the necessary authoritative licenses, a proven history, and comprehensive compliance and security protocols. Data protection and transparent reporting are also essential. These are non-negotiable pillars for any business trusting a provider with significant assets or sensitive information.

Q: What sets JTC apart in this crowded sector?

A: Fast bank (escrow) account openings, preferential interest rates, independence, expertise, and experience. Our global reach means we can facilitate the most complex transactions, with deep regulatory understanding and seamless integration for additional complementary services like cross-border SPV, Fund and Trust administration. Each solution is tailored to meet the unique needs of every client.

Q: What does the future hold for escrow services?

A: The demand for bespoke escrow solutions will continue to grow alongside more complex transactions and greater global scrutiny. Digitisation, higher regulatory standards, and integrated service delivery will become the industry norm. Providers who deliver independent, secure, and customisable solutions will set the pace.

Find out more about escrow services, visit our dedicated page: Escrow Services