Maximus wrote:Are these sites regulated by the local governing body. Like ZOPA is regulated by the FCA.
So, is it fair to assume that if the P2P lending company disappears, they will take billions of investors funds with them?
Mintos is based in Latvia and follows Latvian law.
here's a quote from an article I found
"Latvia, hotspot for p2p marketplaces
It’s no secret that mostly buyback platforms have settled in Latvia. The current regulation there is mostly ok (for the moment) with this form of financing. The regulator has a close eye on that sector and has sometimes a say. Have you asked yourself why Mintos for example amends its contracts, mostly the Latvian’s, from time to time? That’s the reason. It is a myth that there is no regulation of the p2p sector in Latvia. It is rather the case that there are provisional legislations which are not binding to date.
The regulator asks the marketplaces for even more things and is not stringent (and sometimes contradictive) in its claims (according to a lawyer I know). This results in a more or less chaotic environment where the marketplaces have to maneuver. Most of the platforms will in the end get a definitive licence in Latvia, as they can afford the manpower for dealing with legislation. It comes as no surprise that since spring 2017 only one new platform stepped on to the Latvian carpet: Peerberry. This is the platform of Lithunian loan originator Aventus Group. They seem to be confident to be able to fulfill the regulatory requirements.
These platforms operate in a grey area of regulation and there can always be the case that there will be a court ruling, which forces marketplaces to take certain measurements. It has happened in August for example, when all hipocredit loans where bought back from one day to the other. There were speculations that only good performing loans were bought back etc. Fact is that at that point of time a Latvian court ruled that selling private debts to private investors is illegal in Latvia. This case came up due to questions of the banking regulator and the consumer finance protection organization. As per a similar reason the Latvian Mogo loan contracts were restructured. The Latvian court rulings affect only Latvian loans and originators who offer loans in the country. Other regions are not affected by the Latvian rulings. Changes in legislation in Georgia led Mintos to change the structure as well (respectively the loan originators). Per January 1st 2018 the regulation in part of the consumer loan sector changes, so here as well some measurements must be taken. You see, there will come a lot of work for the p2p platforms. I do not want to create any fear with this post, but I think we as investors should be aware of the circumstances in the markets we invest. It is pretty normal if you open up new business fields that the regulator comes and wants to fulfill its assignment. Regulation in an adequate dose is beneficial for all parties!"
source:
https://www.p2phero.com/2018/01/15/regu ... s/?lang=en
