Frequently Asked Questions
Who qualifies as a wholesale investor?
You must be a Wholesale Investor to invest in loans on the Soteria platform. If you meet the criteria for one or more of the categories listed below (summarised from the NZ Financial Markets Conduct Act 2013), you are considered to be a Wholesale Investor. If you are not a Wholesale Investor, please let us know and we can put you in touch with a financial advisor.
- Your net assets, combined with the assets of the entities you control, exceeded $5 million New Zealand dollars ("NZD") for the two most recent financial years, or the total turnover of you and the entities you control exceeded $5 million NZD for the two most recent financial years.
- You own, or at some time during the last two years have owned, a portfolio of "financial products" of a value of at least $1 million NZD. Financial products include debt securities, equity securities, managed investment products, and derivatives.
- You have, during the last two years, carried out one or more transactions to acquire "financial products" where the amount payable under those transactions (in aggregate) is at least $1 million NZD and the other parties to the transactions were not associated with you.
- Your principal business is investing in financial products.
- Your principal business is providing a financial adviser service in relation to financial products.
- Your principal business is providing a broking service in relation to financial products.
- You're in the business of trading in financial products on behalf of other people.
- Within the last 10 years you've been employed in an investment business and for at least two years during that 10-year period, you participated in the investment decisions made by that investment business.
- You're a Qualifying Financial Entity or an authorised financial adviser in New Zealand (as defined in accordance with the Financial Advisors Act 2008).
- You're an "Eligible Investor" because you have sufficient knowledge and experience dealing in financial products that enables you to assess the merits and risks of the transaction. Eligible Investors are required to certify that they are an Eligible Investor by completing the Soteria Eligible Investor certificate and having it certified by an independent lawyer, accountant, or financial advisor.
What is AML (Anti-Money Laundering)?
Money laundering is how criminals disguise the illegal origins of their money. Anti-Money Laundering places obligations on New Zealand’s financial institutions to detect and deter money laundering and terrorism financing. We all need to do our bit to makes New Zealand a safe place to do business. This is why we ask you for specific documents in relation to your identity. Visit www.dia.govt.nz/AML-CFT-Homepage to learn more. Our partner in AML is Cloudcheck.
How do you become an approved Loan Originator?
Only approved Lenders/Originators can put loans on the Soteria platform for investment. Loan Originators are assessed during a due diligence process prior to any loans being put on the Soteria NZ platform. Soteria also undertakes ongoing due diligence on the Loan Originators loan portfolio while they have loans on the Soteria platform. Loan Originators are assessed on certain metrics including their history of default and loss, current default percentage, equity to total assets, AML process, appropriateness of credit policies, appropriateness of governance. This is no guarantee that the Loan Originator can fulfil its obligations but we hope that any early warning signs can be detected. Contact us to talk to us about becoming an approved Loan Originator.
What are the interest rates on the Soteria platform?
The interest rates for Investors on the platform are individual to the particular loan or pool of loans. Please check the interest rates in the Pool Terms . The interest rate advertised is a guide and not a promise as some loans do not perform perfectly. See the Soteria NZ Risk Statement.
Are there any fees for Wholesale or Eligible Investors?
All Wholesale and Eligible Investor fees have been waived until 30 June 2023. After this date, annual fees for Investors are $250 per annum for individuals and $500 per annum for trusts and entities. See the Soteria NZ Fees Schedule.
Are there any fees for Loan Originators?
There are fees for Loan Originators. If you are a Loan Originator, please contact us to discuss these further.
What are the steps to be an Accredited Investor on Soteria?
Only Accredited Investors are allowed to invest on Soteria. To become an Accredited Investor you need to:
- Satisfactory completion of the Soteria Investor Application Form
- Satisfactory completion of the Soteria Wholesale Investor Form
Satisfactorily complete New Zealand Anti-Money Laundering
What’s the difference between tier 1, 2, and 3 information?
- Tier 1 information is very high-level information about a particular loan. This includes the loan to value or loan to cost and the interest rate received by Investors
- Tier 2 information is more detailed than tier 1 and only for Investors who have logged into the app (you do not need to be an Accredited Investor to view tier 2 information). This includes the purpose of the loan and the term
Tier 3 information is the most detailed information about a loan and only accessible to Accredited Investors. This information includes details about the valuation, market commentary, risks of the investment, financial information, etc. This is confidential information and Investors must sign to say that they will keep this information confidential
How do I log in?
You can login via our website in the top right hand corner where it says “Login“or via this direct link.
What is 2 Factor Authentication (2FA)?
2FA double checks that a request to login is really coming from you by using another device such as your phone to verify your account. You most likely already have this on your bank account. On the Soteria platform, you will have the option to either verify your identity through SMS or use the 2FA app. If you choose to use a 2FA app, you will be required to scan a QR code from a 2FA app of your choice. This app will give you a special number which you will need to enter when you login to your Soteria account. We recommend Microsoft or Google. This adds another layer of protection to your account.
How can I keep my account safe?
To keep your account safe we recommend the following:
- Choose a password that is long and complex. Your account is most likely to get hacked if you use a short or predictable password. To help create long and complex passwords we recommend using dashlane (https://www.dashlane.com/). Dashlane is a password manager that provides end-to-end protection.
- Have two-factor authentication (2FA) on all of your emails (see 2FA under FAQs). If someone gets control of your email account, it is easy to change the password. With 2FA, they would also need to control your phone.
- Don’t click on phishing pages. Phishing is when an attacker sends an email that seems to come from a trusted source (e.g. Gmail), directing you to an ordinary looking login page. But in reality, the site is a fake one under the attacker’s control. To protect yourself from this we recommend looking closely at the sender field whenever you receive emails as well as the URL for the login page. You can learn more about phishing here.
What is the minimum amount of investment in a unit trust on the Soteria platform?
The minimum amount of investment is $50,000 NZD.
What is the maximum amount of investment in a unit trust on the Soteria platform?
The maximum amount depends on the loan size but generally this is up to 20% of the value of the current loan. This is in order to maintain FIPIE tax status which is lower tax rate but is not guaranteed by Soteria.
Is Soteria a property ownership syndicate?
No. With Soteria you are investing in units in a unit trust. The unit trust owns a portion of the loan which has a better security position than the Loan Originator and the Borrower. You also have choice around what you invest in and aren’t tied in for long periods of time.
How long will my money be tied up for in a loan?
Six to 24 months, depending on the pool you choose. It will be in the Pool Conditions. In some loans the Loan Term will need to be extended (in case of default). You will be advised when this happens. In the future you will be able to sell in and out of the unit trust investment at your discretion but unfortunately the platform doesn’t have that functionality just yet.
What happens if the Borrower defaults?
Unfortunately Borrowers sometimes default on their obligations. Sometimes these are serious defaults and sometimes they are less serious. In all cases we will work through our default process with the Loan Originator and Borrower to remedy the situation including:
- Providing an extension of time to remedy
- Waive the default
- Sell the assets
Source additional capital into the project
What is the Repayment Waterfall?
All money paid by a borrower under a loan prior to maturity of the loan is paid to a collection account controlled by Soteria. Soteria then distributes that money in accordance with a repayment waterfall. The applicable repayment waterfall is outlined in the relevant Pool Conditions for the loan, but generally the money is applied in the following order:
- firstly, to pay any fees owed to Soteria and to repay costs and expenses incurred by Soteria in administering the applicable pool;
- secondly, to repay costs and expenses incurred by the Loan Originator in administering the applicable pool that have been approved by Soteria or incurred while following Soteria’s instructions;
- thirdly, to pay interest and (at Soteria’s election), to repay principal owed to Investors; and
fourthly, once Investors have received full repayment of their investment and all interest owing, to pay the balance to the Loan Originator.
What is “Funding” “Active” and “Closed”?
Active: The pool is in the active stage and the loan is accruing interest
Funding: The pool is in the funding stage and the loan is not yet earning interest
Closed: The pool is no longer active