AO/LP onboarding

The process behind becoming an Asset Originator or Liquidity Provider

The onboarding process for Asset Originators is split up into two stages.

Stage 1:

Corporate Level Assessment
AOs are invited to make an application through the Defactor platform.
Sign up portal
KYC / AML documentation required are legal documents, including but not limited to; articles of association, list of Shareholders and copy of passports.
Defactor will outsource a trusted 3rd party source for KYC/AML solutions. Liveness, Identity, Residency and Corporate Checks are all covered.

Stage 2:

Risk Assessment
Stage 2 involves building a risk profile. Defactor requests numerous data points including: debtors to be funded, average tenor, years in operation etc. Using the data requested, Defactor is able to produce an internal risk score (IRS) and build a balanced qualitative and quantitative view of the Asset Originator. The internal risk score allows Defactor to accordingly allocate the correct assets across the different liquidity pools, which are governed by different covenants, according to risk profile.
To bolster and ensure fair risk assessment, Defactor uses external credit partners for elements of the process. Additionally, we have external reviews of our risk process to corroborate its robustness and we endeavour to review it regularly, to improve, innovate and reflect market conditions.

The onboarding of Liquidity Providers

Once the LP has passed KYC and AML requirements, access is granted a dashboard where they can assign their capital to selected liquidity pools (multiple pools with different risk profiles). Selection and assigned amount of capital is noted on the back end to ensure the correct payout.