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FinTechs belonging to this category operate trading platforms or online marketplaces for investment opportunities or certain financial contracts – e.g. securities, factoring etc. and sometimes furthermore provide contact to financial experts and tools for the decision-making.
FinTech-signalling and social trading platforms provide users with the opportunity to exchange opinions on financial investments and offer signal providers and traders the possibility to make their securities portfolio publicly visible. This way the portfolios can be linked to and followed by other traders via the platform automatically, so that the trading and investment strategy of the followed traders can be copied.
The platform often cooperates with a financial services provider or a credit institution where both the trader and the follower hold their securities accounts, and which execute the orders both of the trader and the follower and to which the platform passes on the trading decisions.
Introduction
Attitude of the country towards trading, social trading or signalling platforms
Broadly speaking, one of the main hurdles to the development and fostering of such services in Italy is the lack of a proper financial education. As noted by CONSOB in its Annual Report, the financial skills of Italian consumers are particularly low.
In this light CONSOB, along with other competent authorities (the Bank of Italy, Government, etc.), has set out specific programs aimed at increasing the financial awareness of Italian consumers to render more attractive financial services and to allow consumers to make informed investment decisions.
Legal affairs
Obligations and requirements to provide trading, social trading or signalling platforms described above
Although a specific statutory or regulatory framework governing FinTech services is currently absent, the described services may fall under the definition of investment services/activities provided by Section 1, paragraph 5, of the TUF when they are related to such services and activities and are provided on a professional basis to the public. For instance, trading platforms could fall under the category of portfolio management service when they transmit mirror trading signals to third party brokers that execute these orders automatically. Additionally, management of trading platforms could be considered as operation of Multilateral Trading Facilities (“MTFs”) or of Organized Trading Facilities (“OTFs”). In particular, the latter wasintroduced by Legislative Decree no. 129/2017 which implemented in Italy Directive 2014/65/UE on markets in financial instruments (“MiFID II”).