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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
The United States has a robust and active tech-driven investment and portfolio management environment. Many web-based and app-based investment managers only have an online presence and do not have a physical presence. There is broad adoption of the delivery of brokerage and asset management services through tech platforms, particularly among the younger generations, which have become increasingly creative and user-friendly.
From a legal perspective, the US Securities and Exchange Commission (the SEC), the federal regulatory agency that is responsible for protecting securities investors, maintaining fair and orderly functioning of the securities markets, and facilitating capital formation, has expressed concerns about the “gamification” of FinTech platforms and has signalled that additional new regulations targeting these platforms will be proposed and that there will be increased enforcement.
Legal affairs
Obligations and requirements to provide asset and portfolio management, or ancillary services described above
Asset and portfolio management typically are regulated activities, although the types of regulation that are applicable differ depending on the services provided. There are two primary federal regulatory regimes in respect of the asset management of securities. Persons who are engaged in the business of effecting transactions in securities for the account of others are brokers (or dealers if for their own account). Persons who, for compensation, engage in the business of advising others as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who issue or promulgate analyses or reports concerning securities, are investment advisers. In addition, there are other regulatory regimes not described here that affect commodity trading advisors, commodity pool operators, commodity brokers, municipal advisors, municipal brokers etc.
Broker-Dealers:
Broker-dealers are federally regulated under the Securities Exchange Act of 1934 (the Exchange Act), and each state has its own separate broker-dealer laws. Broker-dealers are regulated at both the state and federal level, although both the SEC and the states generally have delegated oversight authority to the Financial Industry Regulatory Authority (FINRA). Accordingly, broker-dealers also must follow FINRA rules. Associated persons of broker-dealers need to be registered with FINRA, which generally requires passing specified tests administered by FINRA, fingerprinting and general background applications, although these requirements may differ from state to state.
Broker-dealers register by filing a Form BD as well as a FINRA membership application and must also become members of the Securities Investor Protection Corporation. The application proces