Investment firms like Mintos are subject to financial regulation. In the EU, this includes MiFID II and other applicable regulations. This supervision provides additional protection for investors by making sure financial institutions follow established rules and requirements.
In a regulated environment such as Mintos, investors benefit from additional layers of protection and transparency.
The financial system is an integral part of our daily lives. For example, we need banks to hold our money or make payments. Likewise, we need investment firms to invest our money to gain future returns. Poorly regulated financial institutions have the potential to harm consumers and undermine the stability of the financial system. Regulation establishes rules to stop things from going wrong, and in the case that they do, consumers and the financial system are protected by these rules.
The requirements of a regulated environment create real benefits for investors.
Safeguarding of investor assets
Mintos is required to hold investors’ financial instruments and uninvested funds separately from its own assets.
Mintos must keep accurate records and accounts that distinguish all Notes and investor funds from any assets owned by Mintos. As part of this, Mintos reconciles its internal records and accounts regularly and takes steps to ensure it has adequate controls to minimize the risk of loss for investors.
Financial instruments belonging to the investors on Mintos are held in the investors’ financial instrument accounts, separately from Mintos’ own assets.
Investors’ funds are protected by holding them in safeguarding accounts in banks licensed in the EU and Switzerland. These funds are only used to execute the investors’ orders to invest or withdraw the funds, or to cover fees and charges payable to Mintos. They are held separately from Mintos' own assets, and creditors of Mintos are not entitled to recover from these funds.
You can read more about safeguarding and counterparty risk in the risk disclosure and the Terms and Conditions of Mintos.
Investor compensation scheme
The scheme protects investors by providing compensation if Mintos fails to return financial instruments or funds to investors.
The investor protection scheme covers situations that typically arise from operational errors, for example, if Mintos is involved in fraud or administrative malpractice or if Mintos goes out of business. The maximum compensation an investor can claim under the investor compensation scheme is 90% of their net loss, up to a maximum of €20 000.
Importantly, the scheme does not protect against investment risks, for example, poor performance of underlying loans, borrower default, or lending company default.
Investor compensation schemes are established according to Directive 97/9/EC and apply to all authorized investment firms and banks in the respective EU country. Mintos is regulated by the FCMC in Latvia and is a member of the Latvian investor protection scheme. The scheme protects retail investors on Mintos irrespective of their country of residence.
The investor protection scheme does not apply to investments in loans via assignment agreements.
Suitable and appropriate product offering
Mintos is required to safeguard investors from taking on excessive risk by assessing their individual situation.
As part of being regulated, Mintos must ensure that investors are aware of the risks of investing on Mintos, and that their financial situation allows them to bear these risks. To meet this requirement, we ask investors to complete an assessment that checks whether our products fit their expectations and goals, and are appropriate for their knowledge and experience.
The outcome of this assessment determines which products and services will be available to the investor. Investing on Mintos isn’t risk-free, so our offering, for example, wouldn’t be considered suitable for investors who wish to only preserve capital.
Investors are provided with in-depth information that aims to help them make well-informed investment decisions.
In a regulated environment, information about the investment and relevant risks must be presented in a standardized, consumer-friendly format designed to help investors understand the behavior of investment products and compare them with other products.
Mintos Notes base prospectuses provide details about the risk factors, general information about the underlying loans, the lending company, Mintos, and general transactional information. These prospectuses have been approved by the competent regulator, the FCMC.
Final Terms documents include additional details that are not included in the base prospectus but are required by regulation, such as details about the underlying loans (for example, loan term and currency). They also include the International Securities Identification Number (ISIN) provided by Nasdaq CSD SE's regional central securities depository. ISIN codes uniquely identify securities, which helps create clarity and accuracy when trading, clearing, and settling investments in securities.
Key information documents (KIDs) provide concise information about the main features of an investment product in a consumer-friendly format. This includes the risk and reward profile and the costs associated with the product.
Mintos also publishes several disclosures, such as information on investment risk and fees.
Applicable regulation includes
Investment firms in the EU must comply with several laws and regulations aimed at protecting investors and the stability of the financial system, such as MiFID. A combination of sound internal control mechanisms, internal and external audits, and regulatory oversight ensures that Mintos strictly follows all applicable requirements.