Safeguarding of investors’ assets on Mintos following MiFID II

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


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