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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
Asset and portfolio management are mostly provided by firms who belong to prominent banking groups (so called “captive asset managers”). Recently, new, independent players from the FinTech environments are emerging (e.g. MoneyFarm).
Asset and portfolio management are subject to prior authorisation and are regulated by the Bank of Italy and Italian Securities and Exchanges Commission (Commissione Nazionale Società e Borsa – CONSOB).
Legal affairs
Obligations and requirements to provide asset and portfolio management, or ancillary services described above
Certain services provided by FinTech companies could amount to regulated activities, under Italian law. In particular, asset and portfolio management services, execution of orders on behalf of clients and investment advice, when they are related to investment services and activities and are provided on a professional basis to the public, fall under the definition of investment services/activities provided by Section 1, paragraph 5, of the Italian Consolidated Financial Law (Legislative Decree no. 58 of February, 24th 1998 – Testo unico delle disposizioni in materia finanziaria – TUF). Only authorised entities can provide investment services/activities to the public. Such entities are banks, investment companies and other intermediaries that may be authorised to provide specific investment services/activities. Requirements regarding financial reserves apply depending on the regulated subject providing the services and on the type of provided service. Ancillary services and connected/instrumental activities may be generally exercised without the need of ad hoc authorisation by authorised entities.
Additional comments regarding the legal situation for asset and portfolio management services or what FinTech’s must be aware of in this business area
Companies established in another EU Member State may provide investment services and activities (including asset and portfolio management services) in Italy under the European passport regime by establishing a branch or also under the regime of the freedom to provide services in the EU. In this case, the legislation of the home country shall generally apply. However, lessened fulfillments shall be carried out. In particular, the establishment of a first branch or the provision of services under the regime of the freedom to provide services in the EU must be preceded by a communication to CONSOB submitted by the competent authority of the Member State where the company is established. In case a branch is established, the requesting company can start providing the relevant investment services/activities starting from two (2) months after the notification.
Economic conditions
Market size for asset and portfolio management services and b