Trading platforms / social trading platforms / signal following
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.
Attitude of the country towards trading, social trading or signalling platforms
There are no noteworthy discussions on this subject other than the Dominican authorities are working on the development of the Financial Innovation Hub to modernize the financial ecosystem; and, warnings to the general public on fraudulent financial schemes and use of crypto assets.
Obligations and requirements to provide trading, social trading or signalling platforms described above
There is no specific regulation in the Dominican Republic for FinTechs that operate trading platforms or online marketplaces for investment opportunities or certain financial contracts, such as securities, factoring, etc. However, companies that operate online trading platforms with publicly offered securities in the Dominican Republic and offer investment advisory on the Dominican stock market (investment decision making) must comply with the Securities Market Law No. 249-17 and ancillary norms and regulation.
Custody accounts or “cuentas de custodia” are opened by the entity authorized to act as security depositary entity when dealing with the custody of publicly offered securities. Thus, the custody of securities registered in the Registro del Mercado de Valores takes place through a licensed central securities depository that is authorized by the Consejo Nacional del Mercado de Valores.
Brokerage involving securities registered with the Registro de Mercado de Valores can only be performed by securities intermediaries and security brokers duly authorized by the Superintendency for Securities Markets.
Social trading platforms that do not involve publicly offered securities, registered with the Registro de Mercado de Valores are out of the scope of the Securities Market Law No. 249-17.
Additional comments regarding the legal situation for trading, social trading or signalling platforms or what FinTech’s must be aware of in this business area
Market size for trading, social trading or signalling platforms and biggest companies in this business area
Information regarding revenues and customers is not readily available.
Additional comments regarding the economic situation for trading, social trading or signalling platforms or what FinTech’s must be aware of in this business area