Response to consultation on draft RTS on Individual Portfolio Management of loans offered by crowdfunding service providers
Go back
Also in general, the option of loan portfolio management truly raises the question what constitutes a 'loan' in contrast to a 'security' (within the meaning of MiFID II, i.e. a financial instrument). This is quite a fundamental question to which the Crowdfunding regulation does not provide any answers. In the context of the RTS, which again is specific to loan portfolio
management, it would be extremely useful to crowdfunding service providers to have certainty that a qualification of a 'loan' is not recharacterized as a 'security'. At the same time crowdfunding service providers that currently work under a MiFID II license may reconsider of reshaping (renaming?) the propositions from financial instruments into 'loans' without materially changing the underlying economics and legal conditions of the proposition. Market practitioners would be very much aided by guidance of EBA what conceptually is a loan and under which circumstances in EBA's view a loan is effectively a security / financial instrument.
Q1: Do you have any comment on the elements to be disclosed as part of the description of the credit risk assessment process?
In general I would like to mention that some information requirements, which are under the RTS specific to the situation of loan portfolio management, seem to be relevant to investors whatever their nature. In other words, it is hence hard to understand why in the situation that Investor A invests in an individual transaction of project owner X and Investor B also invests in project owner X through its loan portfolio mandate, Investor B is provided with more / better information than Investor A.Also in general, the option of loan portfolio management truly raises the question what constitutes a 'loan' in contrast to a 'security' (within the meaning of MiFID II, i.e. a financial instrument). This is quite a fundamental question to which the Crowdfunding regulation does not provide any answers. In the context of the RTS, which again is specific to loan portfolio
management, it would be extremely useful to crowdfunding service providers to have certainty that a qualification of a 'loan' is not recharacterized as a 'security'. At the same time crowdfunding service providers that currently work under a MiFID II license may reconsider of reshaping (renaming?) the propositions from financial instruments into 'loans' without materially changing the underlying economics and legal conditions of the proposition. Market practitioners would be very much aided by guidance of EBA what conceptually is a loan and under which circumstances in EBA's view a loan is effectively a security / financial instrument.