Find out what changes Capitalia has implemented as required by the ECSP regulations and how it impacts investors' experience. Most of the changes concern investor protection and all of it is approved by the regulating body Bank of Latvia to ensure they match the EU regulations.

Additional due diligence checks for new projects ✅

In addition to the risk scoring that Capitalia is using, now Project owners have a requirement to submit additional information for due diligence checks. This includes such items as proof of impeccable criminal records and information about past payment defaults to any creditors of the project owner.

 

Publication of Credit scoring and loan pricing policy ✅

Our published Description of Credit Risk Scoring Model and Loan Pricing Methods will improve transparency with our investors. This document has been published in the Risk management section of the website. Investors now can better understand how we score projects and set pricing. Capitalia strives to ensure fair and appropriate pricing for the loans originated on the Platform. 

• D02, Description of Credit Risk Scoring Model and Loan Pricing Methods 

 

Conflict of interest ✅

Our published Conflict of Interest Policy covers important aspects and changes in this field coming from regulation. To date employees of Capitalia were active investors on the platform, however, their investments will be limited to only Auto-invest strategies. Also, special rules for platform-related company Capitalia Investment Holding, AS, were laid out, allowing it to invest 2.5% of the target financing amount in every project. Capitalia has been co-investing in projects since the very beginning and we believe continuing it ensures the alignment of interest of Capitalia and investors. 

• D03: Conflict of Interest Policy

 

Key Investment Information Sheet (KIIS) publication on new projects ✅

A new document now appears on new projects called "Key Investment Information Sheet" (in short “KIIS”). Every licensed crowdfunding platform must provide such a sheet for each project and the goal is that investors could easily compare projects between different platforms. This document includes details about the project owner, a description of risks, key financials, and similar.

 

Knowledge assessment test ✅

Capitalia implemented an entry knowledge assessment test that all investors must take. Test results will be valid for 2 years. 

 

Net worth calculation and loss simulation ✅

In addition to the knowledge test, a net worth calculation and a loss simulator are

required for each investor. This will help investors to understand better the risks involved in crowdfunding. These details are used only for showing the relevant risk warnings and applying correct limits.

 

Risk warnings based on net worth and lending amounts ✅

Based on the ability to bear loss simulation test, we started showing additional risk warnings to investors when making new investments larger than 5% of their net worth (or EUR 1,000, whichever is lower). These warnings will raise the awareness of investors and provide a choice to continue by approving that they do understand the potential risks.