vfundu Risk Disclosure

Risk Disclosure

Risk Disclosure prominently on the website for investors as well as Business units . Also proposal wise risk exposure disclosure

Disclose prominently on its website the main risks to lenders or investors of using a Crowdfunding Platform

Information about default or failure rates

Information about the service

11.3.3 An operator must disclose prominently on its website key information about how its service operates, including:

  • (a) details of how the platform functions;
  • (b) details of how and by whom the operator is remunerated for the service it provides, including fees and charges it imposes;
  • (c) any financial interest of the operator or a Related Person that may create a conflict of interest;
  • (d) the eligibility criteria for borrowers or Issuers that use the service;
  • (e) the minimum and maximum amounts, if any, of loans or Investments that may be sought by a borrower or an Issuer using the service
  • (f) what, if any, security is usually sought from borrowers or Issuers, when it might be exercised and any limitations on its use;
  • (g) the eligibility criteria for lenders or investors that use the service;
  • (h) any limits on the amounts a lender may lend or an investor may invest using the service, including limits for individual loans or investments and limits that apply over any 12 month period;
  • (i) when a lender or an investor may withdraw a commitment to provide funding, and the procedure for exercising such a right;
  • (j) what will happen if loans sought by a borrower or funds sought by an Issuer either fail to meet, or exceed, the target level;
  • (k) steps the operator will take if there is a material change in a borrower’s or an Issuer’s circumstances and the rights of the lender and borrower or Issuer and investor in that situation;
  • (l) how the operator will deal with overdue payments or a default by a borrower or an Issuer;
  • (m) which jurisdiction’s laws will govern the loan agreement between the lender and borrower;
  • (n) arrangements and safeguards for Client Assets held or controlled by the operator, including details of any legal arrangements (such as nominee companies) that may be used to hold Client Assets;
  • (o) any facility it provides to facilitate the transfer of loans or the sale of Investments, the conditions for using the facility and any risks relating to the use of that facility;
  • (p) measures it has in place to ensure the platform is not used for moneylaundering or other unlawful activities;
  • (q) measures it has in place for the security of information technology systems and data protection; and
  • (r) contingency arrangements it has in place to ensure the orderly administration of loans or Investments if it ceases to carry on business.

Disclosure of information about the borrower or Issuer

11.3.7 An operator must disclose prominently on its website relevant information about each borrower or Issuer, including as a minimum: 

 (a) the name of the borrower or Issuer, the full name and position of each of its directors and officers and the full name of each controller;

(b) the place of incorporation of the borrower or Issuer and the place of domicile of each director, officer and controller;

 (c) a description of the borrower’s or Issuer’s business;

(d) the most recent financial statements, if any, of the borrower or Issuer and a warning that the operator gives no assurances about their accuracy;

(e) the valuation of the borrower’s or Issuer’s business, its current borrowing levels and the source of its borrowing and its liquidity;

(f) a detailed description of the proposal for which it is seeking funding including:

        (i) the total funding sought;

        (ii) how the funds will be used; and

       (iii) the target level of funding sought and what will happen if that level is not met or is exceeded;

(g) the results of the due diligence carried out by the operator on the borrower or Issuer and any limits on the due diligence that could be carried out;

(h) any grading or rating by the operator of the borrower’s or Issuer’s creditworthiness, including:

               (i) how the grading or rating has been assessed;

              (ii) an explanation of what the different grading or rating levels mean;  and

              (iii) a clear statement that this should not be taken as advice about   whether money should be lent to the borrower or invested with the Issuer;

(i) for a loan or Debenture, the duration of the loan or Debenture, details of interest payable and any other rights attaching to the loan or Debenture;

(j) for a Share issue, any rights attaching to the Share, such as dividend, voting or pre-emption rights;

(k) whether any security is being provided and, if so, the circumstances in which it might be exercised and any limitations on its use;

(l) if applicable, any other reward or benefit attaching to the loan or Investment and the terms on which it is available; 

(m) for a Share issue, whether investors have any protection from their shareholding being diluted by the issue of further Shares; and

(n) that the borrower or Issuer, and information provided about the borrower or Issuer, are not checked or approved by the DFSA

Retail Client not to lend more than 5000USD per borrower and 50000USD in year(limits to be put in admin module)

Risk acknowledgement form (part of eligibility requirements )

An Investment Crowdfunding Operator must maintain effective systems and controls to ensure that a Retail Client does not invest more than US$50,000 in total in any calendar year using its service(admin module)