Some of the constraints to its effective application 4 include (i) equity holders and entrepreneur’s aversion to risk given the uncertainties with return on businesses in PLS arrangements; (ii) absence in most countries of proper property rights which could protect PLS contracts in case of litigation; and (iii) PLS does not lend itself for short term financing and equity transactions underlying it are taxed more than interest income.
3 We have to be vigilant of the new threats that may arise as a result of the application of novel technologies. Turning to other innovations such as crypto-assets, there are numerous examples over the last few years of exchanges being hacked and invested funds being lost.