How investors are protected on Mintos
We’re regulated by Latvijas Banka, the central bank of Latvia, the competent authority for investment services supervision in Latvia.
Financial regulation benefits investors
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.
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 central banks, credit institutions, or qualifying money market funds licensed in the EU. Investors’ 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 of investors’ assets (funds and financial instruments) 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 Latvijas Banka, the central bank of Latvia, and is a member of the Latvian investor protection scheme. The scheme protects retail investors on Mintos irrespective of their country of residence.
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.
Investor-friendly presentation of information
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.
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.
MiFID and MiFIR
Investment firm prudential regime