What happens now to Claims?
Hi,
I still have hundreds of Investments in Claims, some in automated strategy, others in Custom strategies.
The Mintos website says Claims cannot be sold in the Secondary market anymore. So what happens now? Am I stuck with these Claims investments until the Remaining Term expires, for years?
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you got a point there, Bernd Rietberg
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"We also would have liked to continue running the Secondary Market for claims until all loans have finished. But the regulator was of a different opinion and they required us to close it."
I hope you understand now that with that you have created more problems/erosion of trust than you anticipated? Maybe it would be worthwhile to at least now to figure out some kind of "solution" or remedy at least...?
Even I, using only a few minutes of my analysis power, can propose 2 ideas
a) Swap feature for investors: Claims => Notes
b) Mintos offers to buy Claims from investors with reasonable discount and then repackages bought Claims to Notes or just sells them ASIS to some large bidder OTCPS i also feel cheated, i have considered Mintos investments as liquid assets. Although i think i never sold anything then now my portfolio management is troubled (in polite wording). And i am not the onlyone.
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Thank you all for your feedback. I understand your frustration. We communicated that secondary market will close the moment it was finally clear from the regulator what is their stance. And thier stance at the end was very strict - no trading in claims in any form. It's good that at least we could convince them that investors should be allowed to cash out from Mintos Strategies, where cashout is an explicit and integral part of the product.
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Hi Martins Sulte,
You can try to paint it in any color you want, but the bottom line is that you mislead investors, by cutting the Secondary Market too fast and without a clear communication about what was coming.
The WHOLE point of Mintos is the existence of a Secondary Market and Cash Out options, so you essentially closed the platform and created a new one. Everyone who kept Claims got tricked and stuck with portfolios that cannot be traded in any way. I personally feel cheated and completely lost trust in Mintos.
A possible solution is for Mintos to buy Claims back from investors to re-package them as Notes and launch in the platform again.
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@rodrigo I couldn’t agree more. I feel the same about Mintos..
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Martins Sulte (Mintos)
A few questions, please answer these:
1. Can you provide proof for that?
2. Would it not have been possible to discuss with the regulator to delay it a bit longer, for the protection of the investors?
3. Why didn't you communicate it more clearly - like I suggested? Was it because of fear of panic sales?
4. What are potential solutions? Are you working on something?0 -
@All:
I will be having a meeting with Mintos in 1 hour, if you have more questions, please let me know and I can ask them for you.
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Bernd Rietberg,
I think we are all looking for a similar solution that allows liquidity for the blocked Claims. Please ask them for an actual plan to clear all existing Claims in the platform. My suggestion is:Mintos buys Claims back from investors to re-packages them as Notes and launch in the platform again.
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Hi Bernd, i agree with Rodrigo secondary market liquidity is the main issue
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Hi everyone,
I spoke with: Marite Urbanovica - Investor Services Agent. Here is a summary of the phone call:
Communication issues: Can we get in contact with Mintos more easily in the future? Will phone calls come back in the future?
- They are planning that. No exact date.
- Why was the secondary market closed?
- Regulator decided to close the secondary market for claims. Claims are not regulated products, thus they should not be existing.
- When was it decided by the regulator?
Probably in May. She will come back to that.
- Why was it done so quickly?
- This was the decision of the management/regulator. She will ask.
4. Would it have been possible to discuss with the regulator to delay it a bit longer, for the protection of the investors?
She will come back about this as well.
5. Why didn't you communicate it more clearly? Was it because of fear of panic sales?
- Will check with management and marketing.
- Marite: "Maybe it could have been due to panic sales".
6. What are potential solutions? Are you working on something?
- For now, the only information she has that the Secondary Market will keep being closed.
7. Do you agree that there should be a solution?
- From the perspective of the investors, yes. But from the other side, I can not comment. There were for sure no bad intentions she says.
- I reiterated that maybe there have been no bad intentions, maybe there have been. Sometimes people do bad things with the best intentions (see WWII). Even if there were good intentions, there have been made mistakes (communication, quickness of the discussions).
They will be coming back to the unanswered questions this week.
I recorded the conversation on my Macbook.
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thanks Bernd
she barely answered 1 out of 10 of your questions, not her fault ...
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Thank you for the update, Bernd Rietberg.
Although Marite avoided the hard questions, it's relatively clear Mintos actively wanted to avoid a sell-off in the and panic Secondary Market. So there is no point in pushing further on it.
We now need to focus our pressure on Mintos implementing a solution to blocked Claims.
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Bernd Rietberg: Thank you for the update. I still think there is no problem with closing the secondary market since I got the information early enough. Maybe it's a matter of people not reading the mails and blog posts.
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rubbing salt into the wound:
Risk and return on the Mintos Secondary Market
(got this in an email from Mintos with the subject: Latest Academy updates plus more weekly news)
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Y
could you specify where exactly you read that, and at what date you read that?
I read the emails as well, but was not in time.0 -
mw
Yeah, wauw. That blog post was published on 25-07-2022, and it is still claiming: "And with €208 836 worth of investments sold every day on average, the Secondary Market has proven to be very liquid." That is a blatent lie.
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Neo - not sure why you think that Bernd Rietberg is supportive; maybe you meant to aim your question at Y?
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@mw you are right my mistake
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Bernd Rietberg No, I cannot name a specific date, but it was before the closing took place. I think Mintos can clearly point out the chhronological order of mails, posts etc. that were made to inform the users.
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Dear Bernd Rietberg thank you for the call with our Investor Service.
First of all, we would like to elaborate on our availability and how investors can reach Investor Service. All investors can reach us by filling out a request form at Mintos Help Center: https://help.mintos.com/hc/en-us/requests/new and we get back to you as soon as possible.
At the same time, it is also possible to fill a form for the callback request: https://help.mintos.com/hc/en-us/requests/new?ticket_form_id=1900000251753.
Second, regarding the closing of the Secondary Market and potential solutions.
The future status of the Secondary Market was not clearly defined by the Regulator at the moment when we received the investment firm license. We could talk with the Regulator about the status of the Secondary Market for claims only in the meetings that followed. This is when we negotiated many final solutions for Mintos in the new environment, but the one regarding the Secondary Market was not flexible - it was requested to be closed as soon as we launched Notes. At that time, the precise date of Notes launch was not known. As regulating a fintech company such as Mintos was something new in the market, unplanned requirements were often shared with us, and the launch of Notes which required us to meet all asked conditions was delayed for some time.In the meantime, we managed to keep the Secondary Market for claims open, and as we approached the official Notes launch date, we managed to negotiate actually leaving the Secondary Market open as long as it was absolutely possible - which means during the whole transition period. Besides this, we managed to agree with the Regulator to keep the cashout feature available for those investments in claims which were made with Mintos strategies, all until the respective loans finish.
And we'd like you to understand that this was really the maximum we could do, as a regulated investment firm.
The next action was to announce the closure of the Secondary Market for claims as soon as we confirmed the final date of the transition period.
The first communication about the closure of the Secondary Market was done on 11 May 2022, as soon as we informed investors about the launch of Notes date and the end of the transition period itself: https://www.mintos.com/blog/notes-to-launch-on-mintos-on-25-may/
There were also multiple follow-ups via email and blog, one of them fully dedicated investors’ FAQ about the transition to Notes and what will happen with investments in claims.
We kindly encourage you to see the article “Mintos investors Q&A: Let’s talk about Notes section III - Questions about the Secondary Market and cashout possibilities for investments in claims”
Link: https://www.mintos.com/blog/notes-to-launch-on-mintos-on-25-may/We don’t find the communication prepared on the topic less than appropriate, given that we were first instructed to close the Secondary Market for claims much earlier. Instead of this, we managed to negotiate to keep it open for a much longer period, and we’d be happy if investors recognized this too.
We'd also like to use this opportunity to remind investors who hold claims that they will continue receiving interest from their investments in loans serviced by the issuing lending companies.
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Undis (Mintos)Martins Sulte (Mintos)
Thank you for the reply.
1. Could you reply with a response to each question underneath each bulletpoint in this post?
-- Like so? Thank you.
2. Regarding communication: In the end it was possible to reach you, but it wasn't easy. Live chat or phone call would make it easier. Will this come?
3. Regarding negotiations about the Secondary Market: That sounds great. Thanks for trying, but I don't think the importance was to keep it open longer - that is in your interest (due to the 0.7% fee). I think the importance was to have the investors notified early *when it was going to close* - that would have been in the interest of the investors.
4. Regarding the exception of Mintos Strategies: This seems very strange to me. I've tried Mintos Strategies back when it started, and although it said that one could 'cash out virtually immediately', when I tried to cash out it went the same way as using the Secondary Market: The loans were just placed on the secondary market and some were not be able to be sold at all - just as regular loans.
Therefore, I stopped using Mintos Strategies, as it gave me much less control to choose high quality loans and the cash out was similar to using Secondary Market myself.
If it is so similar, how can the regulator allow this?
5. What is the name of the regulator, and the name of your contact person?
6. It is great that you negotiated a longer opening time for the Secondary Market, however I can't agree with you this was communicated clearly. I have the following problems with your opinion:
a) The communication was very late, i.e. 1.5 months in advance.
b) You chose to put the 'closure of the Secondary Market' under "Other Important Information". It's not even in the "Key Takeaways"! You also chose to not put anything about the closure in any of the emails that was sent out. Why did you choose to do that?
7. Are you working on a solution?
Looking forward to your reply!
Kind regards,
Bernd0 -
Hello Undis (Mintos),
Thank you for the information. Although I'm not happy with the situation, I now understand better the timeline.
But I think Mintos needs to be aware of the main issue: The current status of having Claims that cannot be traded is NOT ACEPTABLE, and cannot be the permanent solution.
An alternate solution must be found. As some have suggested already, one such solution would be a buy back program, where Mintos buys Claims back from investors and re-packages them as Notes and make available again in the plattform.
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Hello Undis (Mintos),
did you try to somehow "bypass" the relevant regulations(regarding the secondary market)?
You wrote that you managed to agree with the Regulator to keep the cashout feature available for those investments in claims which were made with Mintos strategies.
1.it means that the backend functionality of the claims secondary market is preserved
There is a big question here, is it enough for the regulator if the investor does not see the secondary market page for claims(cannot manually buy and sell on the secondary market)?
Would it be possible to "bypass" this by adding the functionality that the purchased claims could be transferred to the mintos strategy and there could investor request a withdrawal?
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Bernd Rietberg Ondrej Bobek
I appreciate your feedback. We shared with investors that the secondary market will be closed the moment we received the final answer from them. We did our best to prolong the closing for as long as possible, but in the end, the regulator is the regulator, and we have to obey to what they say - the regulator cannot allow trading of unregulated financial instruments (i.e. claims) on a regulated platform, that doesn't work like that.
The Mintos Strategies is a different setup; that's why the regulator was ok that investors can cash out.
With respect to creative solutions and "bypassing" relevant regulations - that is definitely not how we work. The regulatory requirements and the stance of the regulator are clear, and we follow those.
If you believe Mintos violates applicable laws and regulations, you can refer your complaint to the FCMC by emailing fktk@fktk.lv or by submitting a complaint using the online forms available on the government service portal http://www.latvija.lv
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I believe now it's useless to retrace each step, which in any case I do not think was completely understandable.
But now we need a solution for these illiquid claims.Notes are nothing more than a collection of claims, so it is sufficient to absorb the claims into notes..
Why is it so hard?
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Rodrigo Valle Teixeira and FrankV,
Thank you for the questions.
We did also look into this if it would be possible to repack the existing claims into Notes. Unfortunately, it does not work, because each investor has different claims, some claims are bought out completely, some are just partially, and finally, different investors have different claims. All of this makes it impossible to repack them into new Notes as much as we would want to.-1 -
I think you are just washing your hands of this problem.
I'll write bad reviews about you everywhere, to alert future customers of your behavior.
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Hello Undis (Mintos),
I think you misunderstood my proposal. What I mean is a buy-back campaign for ALL customers, ask who is willing to sell back Claims to Mintos, and then take all those Claims from all customers and re-package as Notes available to invest again.
Each user can then widthraw the money, or alternatively the money from the buy-back would be locked in each user account (cannot be widthrawn), and would be used exclusively to invest back in Notes.
To be honest, ANY solution is better than leaving your users locked with millions of €uros in Claims that cannot be traded.
Option 2 is to ask the LOs for them to buy back the Claims. But that depends on that having a finantial advantage for the LO, which I don't know.
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Hi Undis (Mintos), Martins Sulte (Mintos)
To be clear, i represent companies who each have invested, on my advice, 6-figure amounts to Mintos. Yes, these amounts, even in total, are not groundbreaking for Mintos, but still not pennies..
At the moment further investments to Mintos are put somewhat on hold. We are not panicking, but still this Claims liquidity issue has caused some bitter taste.
So please find some solution.
Repackaging to Notes possibility should be very-OK from regulator point of view. Less unregulated assets the better. Yes, I understand that it is extra work for you: negotions with LOs, software developments, legal etc. But i think that this is greatly worth it. Some claims had duration 10 years. For example our portfolios still consists 95% of Claims. So it is not too late. Better late than sorry..
Undis: and we’d be happy if investors recognized this too.
this not how Investor relation management works ;)
Undis: Unfortunately, it does not work, because each investor has different claims, some claims are bought out completely, some are just partially, and finally, different investors have different claims.
No-one has proposed automatic repackaging. This should be manual process initiated by investor. I.e investor asks for a quote based on his/her portfolio. For example there could be restrictions to that this swap can be only inner-LO. For example if i have portfolio of Creditstar loans with average interest rate Y% then i can convert them to Notes with current 17% rate involving losing X% equity. Anyways, it is a solvable problem if you have talented-enough business analysts.. And if you do not have that, I can offer my services.
Disclaimer: we probably would never use that feature, because i understand that there would be some buffer-margins, fees etc, so it would not be financially lucrative, but i still advocate that investors should have this kind of possibility..
For example i decided, after receiving end-of-Claims notification, not to sell the Claims at discounted rates but vice-versa, we were on the buy side to buy discounted Claims, so we are prepared to stay with Mintos on long run, so i hope that our voice is also heard littlebit..
Martins: If you believe Mintos violates applicable laws and regulations, you can refer your complaint to the FCMC by emailing fktk@fktk.lv or by submitting a complaint using the online forms available on the government service portal http://www.latvija.lv
yabadabadoo, this kind of proposals are never constructive..
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cardplus
Wauw, what a great response! If I could upvote twice, I would.
As I understand it, there is thus also demand for having a solution to buy and sell loans.
Please Mintos, look into a solution as Cardplus and many others have proposed.1
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