Peer-to-peer investment platform Twino has become the first to sign up to new crowdfunding industry guidelines in Latvia.
The Alternative Financial Services Association of Latvia (AFSAL) has developed the guidelines which aim to develop a sustainable and transparent collective crowdfunding field in the country.
Guidelines for the crowdfunding industry in Latvia will cover issues such as protection of platform users’ funds, company corporate management, information availability and the provision of information for customers.
It also covers advertising practice, measures to avoid conflict of interest and data protection among other principles.
Twino has become the first to agree to observe the guidelines developed by the association.
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“In any industry at this stage of development, we come across market participants who do not operate according to best market practice,” said Gints Āboltiņš, head of the AFSAL.
“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.”
“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 dictate strict requirements on the protection of platform users funds, corporate management, business ethics and the availability of information,” said Roberts Lasovskis, investment platform lead at Twino.
“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.”
Companies that undertake to implement the crowdfunding industry 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 AFSAL said it has the right to forbid companies from referring to the guidelines if breaches have been established.
Plans for harmonised European P2P regulation may not come into force until next year.
This follows the European Parliament considering proposals for EU-wide crowdfunding regulations since March 2018, agreeing harmonised rules at the end of last year and then the European Crowdfunding Network announcing there is still some fine-tuning needed.