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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
Automated financial portfolio management and robo-advice are one of the fastest-growing fields in portfolio management. The asset management industry is primarily driven by technology and is shaped by trends in cloud computing, the Internet of Things, advanced analytics, as well as artificial intelligence. Examples of robo-advisory companies operating in Czechia include Portu, Fondee, and Indigo – lately, all of these have been growing in terms of a number of users as well as the value of managed assets as Czechs seek new opportunities how to invest their money.
Legal affairs
Obligations and requirements to provide asset and portfolio management, or ancillary services described above
Regulation in the area of investment services applies to bank and non-bank securities brokers (including non-EEA branches), investment intermediaries and tied agents of securities brokers and investment intermediaries.
A securities trader's license is required for the provision of investment services, i.e. the receipt and transmission of orders relating to investment instruments, the execution of orders relating to investment instruments on behalf of a client, trading in investment instruments on own account, the management of client assets, investment advisory services, the operation of a multilateral or organised trading facility and other services listed in the Act on Capital Market Business or European regulations.
A license is required for asset managers associated with investment instruments (asset or wealth management). There are several categories of securities broker (“OCP”) licenses, and the complexity of the licensing process at the CNB depends on these categories: (i) OCP with full license and the ability to receive customer assets (initial capital EUR 730.000), (ii) OCP with the limited license and the ability to receive the deposit. (iii) an OCP with a license without the possibility to receive customer assets (initial capital EUR 50,000), the execution of this version of the OCP being relatively the least complex in practice.
The costs of a licensing procedure include the administrative fee (up to CZK 200,000, i.e. approx. EUR 8,000) and additional legal and other associated costs of up to dozens of thousands of euros, depending on the license type and on which and how many types of investment services the license is supposed to cover.
Funds and investment instruments entrusted by the customer to the company are, in accordance with the Act on Capital Market Business (256/2004 Coll.) subject to the guaranteed system provided by the Guarantee Fund. The Guarantee Fund shall provide compensation in the amount and under the conditions set out in the Act on Capital Market Business, but not exceeding the amount corresponding to EUR 20.000.
Additional comments regarding the legal situation