“In any industry at this stage of development, we come across market participants who do not operate according to best market practice. This can leave a negative impact on the whole industry and its further development. We have developed guidelines by collating operating standards, to consolidate investor confidence in the crowdfunding and peer-to-peer lending fields. We are satisfied that market participants have positively evaluated this self-regulatory initiative from the field,” said Gints Āboltiņš, Head of the Alternative Financial Services Association of Latvia.
The guidelines cover issues such as protection of platform users funds, company corporate management, information availability and the provision of information for customers, advertising practice, measures to avoid conflict of interest, and data protection, as well as a range of other principles.
Though they are guidelines only, not legally binding obligations, the Association says there will be consequences for companies not sticking to the agreed rules.
"Companies which undertake to implement the guidelines in their business practice will ensure that these are understood by company employees and that the guidelines are also freely available to investors both in English and Latvian. The Alternative Financial Services Association of Latvia has the right to forbid companies from referring to the guidelines if breaches have been established," it said.
The TWINO peer-to-peer investment platform is the first player in the market which has committed to observe the guidelines developed by the Association.
“We are proud that TWINO, as the first participant in Latvia’s peer-to-peer lending platform field, has undertaken to follow Latvia’s Crowdfunding Industry Guidelines, which prescribe strict requirements on the protection of platform users funds, corporate management, business ethics and the availability of information. We believe that these guidelines will be a great measuring stick to ensure responsible operations of investment platforms, while also preventing the potentially dishonest players from joining the P2P lending market,” said TWINO's Roberts Lasovskis.
The Guidelines are available to read on the Association’s home page:
The Alternative Financial Services Association of Latvia unites companies operating outside of the traditional banking sector and providing financial services to the residents of Latvia.