Book traversal links for Article 28: Disclosure
Article 28: Disclosure
Date(g): 1/12/2021 | Date(h): 26/4/1443 | Status: In-Force |
Effective from Dec 01 2021 - Nov 30 2021
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1- | By using the Platform, the Debt-Based Crowdfunding Company shall clarify the nature of the business offered and publish awareness-raising information, in addition to the risks resulting from participation in Debt-Based Crowdfunding. The Company shall also ensure that the nature of the relationship between finance process parties is clarified on the Platform. | |
2- | The Debt-Based Crowdfunding Company shall prepare the appropriate declarations and pledges and enable the Participants and the Institutional Beneficiary to read and agree to them before using the Debt-Based Crowdfunding Platform. Before using the Platform, the Company shall obtain an electronic acknowledgment from the Participants through a (Pop-Up Window), which includes their acknowledgment of the risks associated with Debt-Based Crowdfunding. | |
3- | The Debt-Based Crowdfunding Company shall clearly share basic information about how the service works on the Platform. Such information shall include, at a minimum, the following: | |
a. | Details on how the Platform works. | |
b. | The extent to which the Debt-Based Crowdfunding Company is participating in financing Institutional Beneficiaries, in addition to the Company’s policy for participation. | |
c. | Details of the service fees | |
d. | Any financial interest of the Debt-Based Crowdfunding Company or a relevant person that may lead to a conflict of interest. | |
e. | Approved standards for assessing the Institutional Beneficiary’s credit rating, including but not limited to: The Institutional Beneficiary’s financial position standard, the solvency of the Institutional Beneficiary and its owners, the Institutional Beneficiary’s credit record, and the collaterals provided by the Institutional Beneficiary. | |
f. | Eligibility criteria of Participants. | |
g. | The mechanism of dealing with the Participants’ funds when the Finance Amount requested is not covered. | |
h. | The steps taken by the Debt-Based Crowdfunding Company and the rights of relevant parties if a material change occurs in the conditions of the Institutional Beneficiary. | |
i. | The mechanism followed by the Debt-Based Crowdfunding Company in case of default. | |
j. | The measures put in place by the Debt-Based Crowdfunding Company for information security and data protection. | |
k. | Contingency arrangements in the event the Debt-Based Crowdfunding Platform ceases to operate. | |
4- | The Debt-Based Crowdfunding Company shall clearly share on its Platform all relevant information about each Institutional Beneficiary, including at least the following: | |
a. | A detailed description of the Institutional Beneficiary’s project for which it aims to obtain the Finance Amount, including the total Finance Amount requested and how the funds will be used. | |
b. | Audited financial statements of the Institutional Beneficiary for the last two years, if any. | |
c. | Current and future key financial indicators of the Institutional Beneficiary. | |
d. | The results of the Institutional Beneficiary due diligence process conducted by the Debt-Based Crowdfunding Company. | |
e. | A statement clarifying that displaying the project on the Platform shall not be considered as advice to provide financing to the Institutional Beneficiary. | |
f. | Details of the term cost and Participants’ expected profits aside from the charges and fees received by the Debt-Based Crowdfunding Company and any other rights related to the financing. | |
g. | Guarantees and any restrictions on their use. | |
h. | The charges and fees received by Debt-Based Crowdfunding Company. | |
i. | The Debt-Based Crowdfunding Company’s participation percentage in financing Institutional Beneficiaries, if any. | |
j. | Payment terms and the preventive controls and measures taken. | |
5- | The Debt-Based Crowdfunding Company shall clearly share information on its Platform about the significant risks that Participants may face from using the Debt-Based Crowdfunding Platform. Such information shall include, but not be limited to, the following: | |
a. | The potential for Participants to be exposed to material risks, including the loss of some or all of their money in case of default. | |
b. | A clear and detailed list of the potential risks that the Institutional Beneficiary may face. | |
6- | The Debt-Based Crowdfunding Company shall clearly share on the homepage of its electronic Platform the main information on the status of its existing finance opportunities and update this information quarterly or upon the occurrence of developments, whichever comes first. Such information shall include, at a minimum, the following: | |
a. | The default percentage of the opportunities financed, classified according to the level of risks. | |
b. | Total amounts collected by the Debt-Based Crowdfunding Company compared to the Finance Amounts to be collected. | |
c. | Clarifying that the data contained in paragraphs (a) and (b) are not considered sufficient indicators to anticipate the future performance of the Debt-Based Crowdfunding Company or that of Institutional Beneficiaries. | |
7- | The Debt-Based Crowdfunding Company shall follow up with the Institutional Beneficiary’s commitment to the financing contract and notify Participants using electronic communication means (SMS messages or email) within (72) hours from the date of occurrence of any of the below-mentioned cases, in addition to clarifying the measures to be taken by the Debt-Based Crowdfunding Company on a case-by-case basis: | |
a. | Approval of the Institutional Beneficiary’s request for early repayment. | |
b. | Default. | |
c. | Existence of a legal dispute with the Institutional Beneficiary over the financing contract. |