5.11.2021. Latvia, new participants in financial market – investment platforms

Company News

Financial markets around the world are changing rapidly, providing customers with ever new services. One of the fastest growing segments is peer to peer platforms.
This year, the Financial and Capital Market Commission (FCMC) has issued four investment brokerage company licenses to companies that have so far positioned themselves as peer-to-peer platforms: AS Mintos Marketplace, the largest company in this segment in Europe, AS TWINO Investments, SIA DN Operator and SIA Viainvest.
Prior to obtaining the license, these companies were engaged in the business of trading credit claims on creditors on web-based platforms, offering loan investments.
Following the FCMC’s license, companies have been given a transitional period during which they will stop offering investments in loans and will start offering investors financial instruments – debt securities based on loans issued by lenders.
There is no single regulation for this market segment in Europe. Countries have different approaches. One of them focuses on a clear and transparent business model, issuing licenses and monitoring the activities of this segment, which thus provides customers with greater protection.
Companies licensed as investment firms will change their business models, phase out the provision of investments in the form of assignment agreements to both new and existing clients and replace them entirely with the offer of financial instruments.
In the future, investors will be provided with information on investment risks and investment costs.
It is important for investors to know that if an FCMC-licensed investment brokerage company becomes insolvent and fails to meet its obligations, each investor will be entitled to compensation of up to EUR 20,000 in default.