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$Mintos published an update on Notes:

Key takeaways:
- Loans on Mintos will be classified as regulated financial instruments called Notes
- By investing in Notes, investors will gain diversification across 6-20 underlying loans
- Each Set of Notes will have its own International Securities Identification Number
- There will be no changes to how accrued interest is calculated
- Investments in Notes will be governed by prospectuses and final terms
- User experience on Mintos will largely remain the same as it is now

Notes are financial instruments emitted by a special purpose entity within the Mintos group that acts as the issuer. There are 2 ways how Notes will be created based on loans:

- In the direct structure, the issuer acquires the title in loan receivables from the lending company that extended these loans to the borrowers.
- In the indirect structure, the loans underlying the Set of Notes are issued to the lending company by a special purpose entity within Mintos group. These loans are collateralized with loans the lending company issued to its borrowers. The indirect structure is applied when there are reasons why the issuer can’t acquire the loans against the borrowers.

Currently, whenever an investor invests in loans on Mintos, a custom loan assignment agreement is made between the investor and the lending company. Investments via assignment agreements do not fall under regulatory oversight.
Notes, on the other hand, are regulated financial instruments. Once Notes are released, investors on Mintos will be protected by the MiFID II investor protection framework, Prospectus Regulation, Packaged retail investment and insurance products (PRIIPs), and Investor Protection Law.
In addition, investors on Mintos will be protected by a national investor compensation scheme established according to the requirements of EU Directive 97/9/EC. If Mintos fails to provide investment services, retail investors are entitled to a compensation of 90% of the irrevocable loss resulting from the non-provision, up to a limit of €20 000.

The investor compensation scheme does not compensate investors for losses resulting from:
- Changes in the price of an investment
- The default of a borrower, lending company, or issuer
- The lack of a market for the purchase or sale of an investment

The minimum investment is €50 per Set of Notes. Each investment provides exposure to all underlying loans in the Set proportional to the loan amount.

Mintos plans to introduce the first Notes this month.