MIFID LICENSE FOR PAN-EUROPEAN BROKERAGE, INVESTMENT MANAGEMENT AND ADVISORY SERVICES. WEALTHTECH LICENSING
The Pan-European financial license opens the world’s biggest single financial market of all EU/EEA. EU Directive 2004/39/EC on Markets in Financial Instruments Directive (MiFID or MiFID I) allows investment advisors, securities brokers and Forex service providers licensed in one European Union (EU) member state to offer their services across the single financial market of 30 states in all EU/EEA. MiFID creates coherent regulation of financial and investment services between the EU member states.
One brokerage, Forex and investment advisory license for all Europe
MiFID licensed Brokerage, Forex and investment advisory companies are allowed to provide services to the clients in any other EU member state, including big national markets such as Germany and France, without any additional licensing. The license passporting procedure is very simple and takes one month. Regulators from other EU member states are restricted to implement any additional regulations or barriers. Lithuanian national regulation allows CEO and members of the board of the company, dealers and brokers to reside outside Lithuania enabling them to be near their clients. The companies licensed in Lithuania are allowed to be direct members of the stock exchanges, depositories and clearinghouses registered in any other EU jurisdiction without any restrictions. This creates safe, efficient and cost-effective pan-European investment advisory, securities brokerage and Forex dealing vehicle which opens a single European financial market at low cost and provides a competitive advantage.
Modern financial infrastructure makes Lithuania and it’s capital Vilnius very attractive place to securities brokers, Forex dealers and investment advisers from around the world. Revolut Securities holds Lithuanian Category B brokerage license serving Revolut brokerage business in Europe. Nasdaq, the founder of the world’s first electronic stock market, is strongly operating in Lithuania and the Baltic States and has established Nasdaq Technology and Business Support Competence Center in Vilnius. Nasdaq Stock Exchanges in Tallinn, Riga and Vilnius form the Baltic Market, the core idea of which is to minimize the differences between the markets in order to facilitate cross-border trading. Central Securities Depository in Lithuania, Latvia and Estonia is also owned by Nasdaq providing high-level depository services. International banks SEB, Swedbank, DnB based in Lithuania together with their local competitors provide the world-class financial infrastructure for investors and FinTech start-ups. The possibility to outsource relatively cheap services from the local service providers gives a strong competitive advantage compared to other European jurisdictions.
Wealthtech licensing and business-oriented regulation
WealthTech stands for wealth and technology and is kind of FinTech. It provides digital solutions for investment advice and management, brokerage and wealth management in the same way as FinTech provides digital solutions for payment processing. WealthTech transforms traditional investment services into efficient and cost-effective solutions using Artificial Intelligence, Big Data and other technologies making investments assessable not only for high-net-worth individuals but for a wider range of clients. It creates really working alternative to traditional investment banking. Robo-advisory, digital brokerage and portfolio management, micro investments, expert investor following and other digital investment management tools are considered as WealthTech. The Bank of Lithuania (Central Bank and Regulator) came out from the watchdog’s role, committed to consult and support newly established innovative start-ups and not punish them during the first year of operation for minor infringements. Business oriented regulatory behaviour and significantly lower financial institution’s incorporation, licensing and maintenance costs makes Lithuania the preferred jurisdiction for the modern investment advisers, fund managers, stockbrokers and Forex dealers who plan to provide services in the single European financial market.
Why Lithuania is the top jurisdiction for brokerage and investment advisory licensing
- Fast licensing process. Issue of the license within a period of 3-6 months or even faster.
- No particular requirement for the company’s management to reside in Lithuania.
- Documents can be submitted in English.
- Regulatory “Sandbox”.
- Start-up visas. Special visas for the citizens of non-EU countries running innovative businesses in Lithuania.
- WealthTech licensing solutions.
- Possibility to be direct members of stock exchanges, depositories and clearinghouses in any other EU jurisdiction.
ECOVIS experience in financial licensing
Being a part of ECOVIS International consulting network operating in more than 80 counties around the world, ECOVIS ProventusLaw is currently considered to be the most experienced financial licensing advisor in Lithuania. In Lithuania, ECOVIS licensed deVere and Nium, Contis Group who set up their European operations centers in Vilnius. ECOVIS ProventusLaw provides all necessary services for the financial institution licensing, including preparation of licensing documentation, representation at the Bank of Lithuania (Regulator) during the licensing procedure, company incorporation, office registration, advice on IT, HR, compliance and other issues arising during business incorporation. When the license is issued, ECOVIS offers accounting, regulatory reporting, audit, compliance and legal services for the operational business.
Knowledge without experience is of little use. Therefore we are proud of having our own valuable experience to share with you.