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Notes FAQ

Opmerkingen

15 opmerkingen

  • Raphael Stalker

    So if I understood correctly Notes will completely replace the current loan contracts currently offered on the Mintos primary marketplace?

    If yes, what happens to the 60-day buy-back guarantee currently offered with many loans offered on Mintos? I don't see anything about it and I don't see how a lending company would buy back a fraction of my Notes investment?

    3
  • Dennis

    First of all thanks for the much anticipated update about notes. I have some additional questions.

    • Will notes offer a better protection against defaulting LO's? When I invest in a note do I effectively have a claim against the LO or the borrower.. or in other words; When the LO goes bust, do a have a direct claim on the borrower, or only on the LO. In this regard see also the question of Joshua four months ago: https://help.mintos.com/hc/en-us/community/posts/360015617098-Legal-structure-of-new-Notes-
    • I struggle to understand the direct en indirect structure and why you would allow both options to exist. Will we be able to easily see en select notes only on direct structures as investments? 
    • I might be wrong but i think a once a quote saying that LO's just make bulk payments toward Mintos and that they are not directly traceable towards underlying loans (perhaps this was only the case with recovery's). Has anything changed with the setup of notes and the processing of payments? (also regarding pending payments, or cashouts)

    Thank you for answering my questions.

    Kind regards

    Dennis

     

     

    2
  • Onni

    Hi,

    One question comes up from the update. It says minimum investment per note is 50€. Does this mean 50€ increments or just minimum like now primary is 10€?
    I assume this applies to both primary and secondary market?

    1
  • Erich

    Hi,

     

    As we are now would deal with Notes not crowdfunding is it would be possible to utilize Estonian investment account to postpone taxes? This is crucial information for investors from Estonia what can make your product very popular for Estonian investors.

    As:

    The investment account enables to reinvest the gains or income exempt from income tax received on financial assets and to postpone the income tax liability (§§ 171 and 172 of the Income Tax Act).

    The definition ’financial assets’ includes, for example, the publicly traded securities, shares and units of an investment fund, bank deposits and contributions made under unit-linked life assurance contracts (subsection 17(2) of the Income Tax Act).

    Here you can get the main information if the topic is not familiar:

    https://www.emta.ee/eng/private-client/declaration-income/taxation-income-received-financial-assets-through-investment

    0
  • Annija (Mintos)

    Hi Raphael Stalker,

    It works the same way as previously - as soon as the loan is 60 days late, it is bought back. This action triggers repayment in the Set of notes schedule.

    Let's take an example: there is a Set of notes which consists of 10 loans; each loan is 100 EUR worth, so the total value of the Set of notes is 1 000 EUR.

    For one of those loans, the buyback is triggered, which means that 100 EUR repayment for the Set of notes is triggered (the outstanding amount of this Set of notes is reduced to 900 Eur).

    Buybacks happen at the loan level - the Set of notes continues to be active till the moment when there are active loans behind it.

    0
  • Annija (Mintos)

    Hi Onni, The minimum investment in any single Set of Notes on the Primary Market is EUR 50, USD 60, DKK 370, PLN 200, GBP 40, SEK 500, RUB 3600, KZT 20 000, MXN 1000, CZK 1300, GEL 200 or RON 250. The minimum investment amount on the Secondary Market is EUR 1, USD 2, DKK 8, PLN 5, GBP 1, SEK 10, RUB 70, KZT 400, MXN 20, CZK 30, GEL 3 or RON 5.

    0
  • Onni

    Hi,

    Thanks, so it functions the same way as before? It's just a minimum investment, not an increment?

    Meaning that I can invest for example 51€ to one note on the primary market?

    0
  • Erich

    Hi,

     

    As we are now would deal with Notes not crowdfunding is it would be possible to utilize Estonian investment account to postpone taxes? This is crucial information for investors from Estonia what can make your product very popular for Estonian investors.

    As:

    The investment account enables to reinvest the gains or income exempt from income tax received on financial assets and to postpone the income tax liability (§§ 171 and 172 of the Income Tax Act).

    The definition ’financial assets’ includes, for example, the publicly traded securities, shares and units of an investment fund, bank deposits and contributions made under unit-linked life assurance contracts (subsection 17(2) of the Income Tax Act).

    Here you can get the main information if the topic is not familiar:

    https://www.emta.ee/eng/private-client/declaration-income/taxation-income-received-financial-assets-through-investment

    0
  • Lucja (Mintos)

    Hi Onni Yes, that's correct, it's a minimum investment, and you can invest for example 51€ to one note on the primary market.

    0
  • Erich

    Why my question is in "Pending approval" already for 5 days?

    1
  • Onni

    Hi,

    Ok, so the minimum level changes on both markets. One question comes up. Let's say I buy first buy 50€ from primary and then put it on sale on the secondary market. Someone buys 49.10€ of my note and I'm left with 0.90€.

    Now the part that I have is less than the minimum amount in the secondary market, does this mean I can't sell it?

    1
  • Dennis

    Undis (Mintos)

    ''Following the end of these 30 days, on 19 September 2021, the updated terms and conditions will automatically come into force''

    ''During this time, if you have any questions, you can go to our dedicated Mintos Community section, where we’ll be actively answering any investor queries.''

    Can you please answer my question before the 19th? the original question of Joshua is already more then four months old and also not answered yet. 

    0
  • Annija (Mintos)

    Hi Onni, Yes, you are correct, you will not be able to sell these 0.90 eur

    0
  • Annija (Mintos)

    Hi Erich, Thank you for letting us know. Your post was approved. We have identified the problem, hopefully, this will not happen in the future again.

    About your question:

    Thank you for bringing this topic here and sharing the link.

    As it is mentioned in the Estonian Tax Administration web page (https://www.emta.ee/eng/private-client/declaration-income/taxation-income-received-financial-assets-through-investment): "the investment account is a cash account (standard bank account) opened with a resident credit institution of a member state of the Organization for Economic Cooperation and Development (OECD) or in the permanent establishment of a credit institution located in the OECD country."

    Please note that Mintos as a Latvian licensed investment firm is not a credit institution. Thus, it might not be possible to use an investment account regime for income tax purposes.

    0
  • Annija (Mintos)

    Hi Dennis,

    Thank you for your comments. See below our answers to your respective questions:

    1. When we look into the safety of Notes compared to the previous investment structure based on the assignment agreements, we could agree that Notes are a safer investment type. Protection mechanisms that apply to Notes include the suitability and appropriateness rules, the information disclosure, the investor compensation scheme - to name a few. This is how it looks. When investing in a Note, the investor will be buying a financial instrument backed by a pool of loans issued to borrowers. The investor won’t have a direct claim against the borrower or the lending company. However, from the legal perspective, the transactional setup for the Notes where the issuer (a special purpose vehicle) has a direct claim against the lending company is much leaner and potentially more efficiently enforceable in case of the lending company’s default. For various lending companies there is planned to be a pledge over the receivables of the loan that the lending company retains as skin in the game. This is something that can be introduced due to the new setup: instead of the numerous investors, the pledge now will be established in favor of one issuer.

    2. In the direct structure, the issuer (a special purpose entity whose principal purpose is the issue of Notes and other financial instruments with respect to loans issued by lending companies affiliated to the Lending Company) acquires loan receivables from the lending company that extended these loans to its borrowers. On the other hand, the indirect structure is applied in cases when there are reasons why the issuer can’t acquire the loans against the borrowers, and here’s the reasoning behind it. As Mintos works with lending companies from more than 30 different countries, each of them has its regulations that apply to how the assignments of loans issued to borrowers can happen. We need to make sure that if the assignment happens, it will be recognized and enforceable in the country where the loan was issued to the borrower. These local laws may contain specific rules on both how and to whom the loans can be assigned. If the assignment can't happen, then we introduce the indirect structure. In the indirect structure, the loans underlying the Set of Notes are issued to the lending company by a special purpose entity (SPV) - issuer - within the Mintos group. Each loan to the lending company is linked to a loan that the lending company has issued to its borrower - the borrower's loan is the source of repayment and the payment schedules are aligned. In such a structure, the loans underlying the Set of Notes will be collateralized with loans the lending company issues to its borrowers.

    3. Besides additional internal control of incoming and outgoing transactions, the compliance activity that will not impact the speed of payments processing, nothing changes when it comes to the mentioned processes with the introduction of Notes.

    0

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