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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.
Introduction
Attitude of the country towards modern financial advisory and broking services
There is a potentially huge market for intelligent asset management, which also presents opportunities for the development of modern financial advisory services. Many institutions, however, have slowed down the pace of financial advisory services recently. The situation is caused by the strong regulatory oversight of the fund investment advisory business, as well as the fact that these institutions have recognised the potential risks and have adopted a more prudent attitude accordingly.
Legal affairs
Obligations and requirements to provide financial advisory and broking services, or ancillary services described above
To engage in securities and futures investment advisory business, the entity shall obtain an investment consulting services license issued by the CSRC. The applicants shall satisfy relevant qualification requirements, such as the registered capital (more than RMB1 million (equivalent to approximately USD157 thousand or EUR142 thousand)), proper premise, professional, internal control mechanism. In practice, due to the policy control, it is very difficult to obtain such license issued by CSRC for now. Further, the personnel engaging in securities and futures investment advisory business shall join a licensed investment advisory institution and obtain the securities and futures investment advisory qualification.
The FinTechs in this area should be careful not to make the investment on behalf of customers, rather than providing advice, unless they further obtain the license of a security broker. Currently, CSRC is strengthening the supervision on investment consulting services provided online. In practice, several FinTechs were imposed with the administrative penalties due to being involved in security trading without the license of a security broker.
Auto trading and broking services are deemed as operating in the security brokerage business, which shall be subject to the license for security business issued by CSRC. The entity holding the security business issued by CSRC is the security company. The registered capital of the security company shall be no less than RMB50 million (equivalent to approximately USD7.9 million or EUR7.1 million). The net assets of the major shareholders of the securities company shall not be less than RMB50 million (equivalent to approximately USD7.9 million or EUR7.1 million); the first major shareholder or/and the controlling shareholder of the securities company engaged in business with significant leverage shall have total assets of not less than RMB50 billion (equivalent to approximately USD7.9 billion or EUR7.1 billion) and net assets of not less than RMB20 billion (equivalent to approximately USD3.1 billion or EUR2.8 billion).
Additional comments regarding the legal situation for financial advisory and broking services, or adjacent services or what FinTech&rsquo