Investor protection on Mintos Archives | Mintos Blog

Regulation takes transparency on Mintos to the next level

Mintos Blog — Wed, 29 Jun 2022 13:28:02 +0000

When investing in Notes on Mintos as a regulated platform, investors benefit from being able to view in-depth and transparent information before they make investment decisions.

What does transparency mean, and why is it important?

When it comes to Notes, transparency means investors have access to all of the information that’s required to make a well-informed investment decision. This includes in-depth details on how Notes work and the risks associated with investing in them.

This information is presented in a standardized, investor-friendly format that’s used across all regulated investments. So it’s easy to compare Notes investments with each other and other securities (such as stocks or ETFs).

Unregulated platforms aren’t required to provide investors with this level of detail, meaning it may be more difficult to fully understand the product you’re about to invest in and the risks associated with doing so. Plus, it can be harder to compare different investments when they’re not presented in the standardized format that’s followed by regulated platforms.

Transparent information about Notes on Mintos

In accordance with Prospectus Regulation, we create two documents for each Set of Notes that provide you with detailed information.

First, there are the Mintos Notes base prospectuses. These base prospectuses provide details about the underlying loans, the risk factors, the lending company, Mintos, and other general transactional information. Each base prospectus is approved by the FCMC (the governing body for prospectus regulation in Latvia) and NASDAQ (the issuer of ISIN codes for Notes). Typically, there’s one base prospectus issued for each lending company. To view the base prospectuses currently available, visit our page on legal documents.

The details not included in a base prospectus are added to the Final Terms. This document is unique to each Set of Notes and annexed to a base prospectus. It provides specific details about the underlying loans of a Set of Notes, such as currency and loan terms.

The Final Terms also include the International Securities Identification Number (ISIN) for the Set of Notes, which is provided by Nasdaq CSD SE’s regional central securities depository. ISIN codes are used to uniquely identify securities (in this case, a Set of Notes) and help create clarity and accuracy when trading, clearing, and settling investments in securities.

In addition, we provide you with key information documents (KIDs) for each Set of Notes. Prepared under the Packaged Retail and Insurance-based Investment Products (PRIIPs) regulation, KIDs are more concise than a base prospectus. A KID aims to help you understand and compare the key features, risks, rewards, and costs of different investment products more quickly and efficiently.

Finally, we also publish relevant disclosures and policies, including information on investment risk and fees. View disclosures.

To learn more about the protection mechanisms of regulation, see investor protection on Mintos.

Suitability and appropriateness on Mintos

Mintos Blog — Wed, 22 Jun 2022 14:05:19 +0000

As part of being regulated, we ensure that our investment offering is suitable and appropriate for investors following the MiFID II investor protection framework.

What does suitable and appropriate mean, and why is it important?

A suitable and appropriate investment means an investor understands the offering and knows the risks they’re taking on, considering their financial situation, knowledge and experience of investing, and investment goals.

Investing on Mintos isn’t risk-free, so it’s important that we ensure our offering is suited to each investor.

How do we determine what’s suitable and appropriate on Mintos?

We ask investors to complete an assessment to ensure they’re aware of the risks of investing in loans on Mintos and that their financial situation allows them to bear these risks.

The assessment evaluates whether our offering fits your expectations and needs in 4 sections:

Financial situation: They’re asked a few questions about your assets and annual income.
Knowledge: This section assesses your investment knowledge to determine whether you understand the terms and risks involved with investments on Mintos.
Experience: This section focuses on your experience investing in specific asset classes.
Investment goals: Lastly, you’re asked a few questions about your investment goals and risk appetite.

Depending on your answers, we offer ways of investing that are considered suitable and appropriate for you. For example, whether or not Mintos strategies or custom automated strategies are suited to you and how much you can invest using them.

The responsible investing requirement

Based on an investor’s net worth and investment goals, we’re also required to set an amount they can invest up until using automated strategies on Mintos. Once you reach this amount, you can still invest manually. This ensures investors don’t take on too much risk when using automated strategies.

You can see how much you can invest using automated strategies under the Suitability & Appropriateness section of your account settings.

What to do if your circumstances have changed

If your circumstances have changed since you last completed the assessment, you can update your answers at any time in the Suitability & Appropriateness section of your account profile.

To learn more about the protection mechanisms of regulation, see investor protection on Mintos.

Safeguarding of investors’ assets on Mintos following MiFID II

Mintos Blog — Wed, 08 Jun 2022 13:10:43 +0000

A significant benefit of investing in a regulated environment on Mintos is the safeguarding of investors’ assets subject to the requirements of MiFID II.

The Markets in Financial Instruments Directive (MiFID II) is a regulatory framework that aims to increase investor protection and reduce systemic risk by setting common standards and rules for investment firms operating in the EU¹. And it’s under this framework that Mintos operates as an authorized investment firm.

Why does the safeguarding of investors’ assets matter?

Unregulated service providers aren’t required to hold investors’ assets separately from their own assets, meaning if something were to go wrong operationally, an investor’s investments and funds could be at risk. Say an unregulated service provider were to go bankrupt, investor assets might be treated as the platform’s assets, and an investor could experience difficulties getting their funds back, if at all.

However, investment firms regulated under MiFID II, such as Mintos, must have systems in place to ensure all investor assets are safeguarded if Mintos were to experience operational errors.

Notes and uninvested funds are held separately from Mintos assets

Notes that belong to investors on Mintos are held in personal financial instruments accounts, separate from Mintos’ own assets. This means their financial instruments are always theirs and cannot be treated as the platform’s assets, as could be the case with unregulated platforms.

Uninvested funds in investors’ Mintos accounts are also protected and are held in safeguarding accounts in banks licensed in EU countries. These funds are only used to execute investor orders to invest or withdraw funds or to cover fees and charges payable to Mintos. Mintos cannot use them in any other way (which is not necessarily the case with unregulated platforms).

Mintos’ organizational requirements

We’re also required to keep accurate records and accounts that distinguish all Notes and investor funds from any assets owned by Mintos or other investors. As part of this, we reconcile our internal records and accounts regularly and take steps to ensure we have controls to minimize the risk of loss for investors. And to check that Mintos follows these requirements, we’re audited and supervised by the regulator.

To learn more about the protection mechanisms of regulation, check out investor protection on Mintos.

¹ Adopted in Latvia through the Latvian Financial Instrument Market Law