Body
FinTechs belonging to this category offer asset and portfolio management services via an internet platform or software programs and usually manage and dispose of the assets of their customers long or short term according to their specifications without actually holding the property or the possession of those assets. FinTechs, which provide information about and access to overnight or time deposit accounts at national and foreign banks and which execute the transactions to these accounts, also belong to this category. Some FinTechs however only act on request of the customer.
Aside from that some FinTechs offer software or internet solutions enabling users to manage and plan their personal finances on their own by providing graphics, overviews and compilations of their financial data and sometimes indicating financial risks or opportunities, but without actually managing the assets.
Introduction
Attitude of the country towards modern asset and portfolio management services
Asset and portfolio management still relies majorly in the more traditional brokers. Recent national legislative changes, in connection with EU law dynamics, have sought to improve the relevance of asset and portfolio management in Portugal.
Legal affairs
Obligations and requirements to provide asset and portfolio management, or ancillary services described above
Asset and portfolio management services over financial instruments are deemed investment services under the Portuguese Securities Code and the Legal Framework for Investment Companies.
The provision of investment services is subject to an authorisation from CMVM. Authorisation requirements relate to the company’s capital structure, information on the shareholders, corporate governance, material/technical and human means, internal control/compliance and risk management mechanisms, among others.
The minimum share capital is currently divided into three tiers – EUR 75,000, 150,000 and EUR 750,000, depending on the services to be provided. Portfolio management is included in the EUR 75,000 tier, but a case-to-case analysis is required. Further prudential requirements apply.
Fees will be due for registration with CMVM. Due to comprehensive legislative change, prior contact with the regulator is advisable to confirm.
Investment firms are subject to the AML duties.
Additional comments regarding the legal situation for asset and portfolio management services or what FinTech’s must be aware of in this business area
The New Regime applicable to investment firms entered into force on 1 February 2022 and new regulation is expected by CMVM. The New Regime simplified the applicable regulation to the investment firms, unified the several investment firms and appointed CMVM as the sole supervisor, which is expected to enhance the investment services market. Albeit this time of change CMVM is accepting authorisation requests and available to assist applicants with queries around the application process.
In April 2023, a new Legal Framework for Asset Management was passed in Parliament, followed by a CMVM Regulation on the same topic, published in December. These sought to compile legal frameworks that were spread over multiple laws, as well as transposing the most recent EU law developments.