Financial advisory and broking services including robo advisory and auto-trading
FinTechs belonging to this category offer advisory and broking services for investments usually via an internet platform.
Robo advisory services usually offer an investment proposition following a series of questions concerning the personal financial background and the risk-bearing capacity of the user. Sometimes the respective platform also enables the user to directly execute the proposed investment.
Auto-trading concerns all services which automatically trade on behalf of the customer according to his or her specifications.
Apart from that some FinTechs collect and offer merely or as an ancillary service market information or operate comparison portals to increase the transparency of the capital markets and to help the investor with his decision-making.
There are also FinTech-advertising-services which advertise various financial services or products.
Attitude of the country towards modern financial advisory and broking services
Generally, the CM Law regulates provision of investment services, ancillary services, investment advice and investment recommendation in Serbia. Investment advisory and brokering services explicitly fall under the definition of investment services which may be provided in Serbia only by the local investment companies and authorized banks licensed by the SEC. Robo advisory and auto-trading are not explicitly regulated, but these services could fall under the aforementioned activities regulated under the CM Law, such as investment services in regard to the receipt and transfer of the orders for financial instruments trading and provision of the investment advice.
In case these services are provided in Serbia from abroad, besides licensing issues, the services providers must also be aware of the strict forex legal framework which regulates in detail payments to/from abroad.
It seems that there is a growing interest for such services on the market.
Obligations and requirements to provide financial advisory and broking services, or ancillary services described above
Under the CM Law, investment services, including investment advisory and brokering services may be provided in Serbia by the local investment companies and authorized banks licensed by the SEC.
The documents necessary for obtaining the license are listed in the CM Law and relevant SEC decisions/by-laws and include for example business plan, information about qualifications of the management of the investment company, proof of fulfilment of staff and technical requirements, organizational structure, capital requirements proof, etc.
In order to become licensed, the investment company should fulfil certain conditions, such as to obtain license issued by the SEC and satisfy minimum capital requirements, which is EUR 125,000 in case of the provision of services in regard to the receipt and transfer of the orders for financial instruments trading and provision of the investment advice (the SEC can decide to lower the amount of the minimum capital to EUR 50,000 if the investment company provides only services in regard to the receipt and transfer of the orders for financial instruments trading). The investment company should maintain minimum capital requirements in accordance with the SEC’s regulations.
Additional comments regarding the legal situation for financial advisory and broking services, or adjacent services or what FinTech’s must be aware of in this business area
Further market development in this segment is expected following entry into force of the New CM Law.
Market size for financial advisory and broking services as well as adjacent services and biggest companies in this business area
At the moment, investment services in regard to the receipt and transfer of the orders for financial instruments trading are provided by both authorized banks and investment companies present on the market whereas provision of the investment advice is centered around authorized banks. There is no information about the number of customers in this segment.
Additional comments regarding the economic situation for financial advisory and broking services as well as adjacent services or what FinTech’s must be aware of in this business area