"Nordstreet" has received a European crowdfunding license

The Bank of Lithuania has granted "Nordstreet" a crowdfunding service provider license under the European Union (EU) and European Economic Area (EEA) Crowdfunding Regulation (Regulation on European Crowdfunding Service Providers).

This license will allow us to operate more broadly, bring more systematic structure to our activities, and open up new opportunities for both us and you.

We inform interested parties about the differences between the new and old licenses:

• The Crowdfunding Regulation (CFR) allows the provision of services in all EU and EEA countries;

• Investors will be categorized into groups (those with and without investment experience);

• Investors without experience will have a four-day reconsideration period during which they can withdraw their application;

• If inexperienced investors invest more than €1,000 or 5% of their asset value, they must be provided with a risk warning, and consent must be obtained;

• A more detailed suitability test is applied, with an obligation to periodically review it;

• The platform is required to model its ability to absorb losses;

• The platform must publish a Key Investor Information Document (KIID);

• Creditworthiness assessments become more comprehensive but are not mandatory;

• Auto-investing is enabled—this involves the investment of pre-allocated funds into loan projects, executed by the crowdfunding service provider according to objective criteria set by the client. Additional investor protection conditions apply: auto-investing must be based on at least two criteria (interest rate, credit rating, sector, etc.);

• Crowdfunding service providers are required to have processes and procedures to evaluate projects from multiple perspectives;

• Crowdfunding service providers must provide clients with information about automatically generated portfolios from various angles;

• Auto-investing cannot evolve into individual or collective asset management;

• Crowdfunding service providers cannot receive any inducements for auto-investing activities;

• Auto-investing is not considered an investment recommendation as long as project selection criteria and execution processes are clear and objective;

• A secondary market, referred to as a bulletin board, is planned to avoid associations with regulated secondary markets under Directive 2014/65/EU on financial markets (MiFID). Key features of the bulletin board: it is intended only for loans and securities obtained through the same crowdfunding platform, enabling buying and selling;

• The KIID must be published along with the loan;

• Information must be provided about the operating principles of the bulletin board and the non-applicability of protection under the Law on Deposit and Investor Protection;

• A simplified assessment of the reliability of project owners will be applied.

https://eur-lex.europa.eu/legal-content/LT/TXT/?uri=CELEX%3A32020R1503