Debitum is pleased to confirm that their clients, as of now, will be investing in financial instruments – Asset-Backed Securities (ABS).
According to Debitum, this is one of the final steps after acquiring a license for the Debitum investment platform from the Financial and Capital Market Commission (FCMC – the same institution that regulates all banks in Latvia) in September 2021.
At the moment only 4 investment platforms in Latvia and “probably in the whole Europe have met the regulatory criteria to be granted this license.” However, Debitum claims they are the first to launch and provide regulated financial instruments to their investors. The ABS is already online and is “available to Investors on [their] user-friendly investment platform.”
Martins Liberts, Founder of Debitum, stated:
“We are delighted to open up opportunities that were once only available to the “big players” and by doing so we are bringing real change to the sector.”
As noted in the update, asset-backed securities are “derived from a pool of underlying assets.”
As explained in a blog post, the assets are the same loans they previously offered individually “for assigning claim rights – business loans, factoring, loans connected to video gaming and other industries.”
The company further noted that the pool is “made up of assets (loans) generated by Loan Originators.” By pooling them together through a securitization process monitored by the regulator FCMC, financial institutions like Debitum may provide investors opportunities for investments that “have diversified risk profiles, thus minimizing the risk of default.”
As noted in the update:
“The increasing popularity of regulated financial instruments such as ABS shows their appeal as a quick and easily manageable investment with a fixed term and fixed income. Previously, these kinds of financial products were available and used only by institutional and professional investors due to their complexity. Still, thanks to the new innovations and legal frameworks, Debitum is able and pleased to bring ABS to a broader audience, providing a safe investing experience while maintaining strict compliance procedures.”
The firm added:
“Since obtaining the license from the FCMC, we have been updating all our services and procedures to comply with the licensing regulations so that we can offer you an exclusive ABS listing that is featured only on the Debitum platform.”
Among the changes that have been made, investors are “now classified in accordance with the EU MiFID II regulation.”
The update also mentioned that “Suitability and Appropriateness Assessment” is “a requirement for all existing and potential investors.”
Debitum’s Terms and Conditions and Know Your Customer (KYC) questionnaire have also “been updated,” the announcement revealed while noting that if you have not updated any information on your profile, they ask you to “update your information as part of the transitional process.”
The firm also shared:
“We will create more ABSs and offer them online to our investors, offering regulated investment options different from the traditional investment models of bonds and deposits. As such, they can be more easily compared before investing.”