Securities dealer/Investment broker licence

Nov 21, 2018

Who can apply for an investment broker licence?

A licence may be obtained by s.r.o. or a.s. companies which have initial capital of EUR 50,000 to EUR 730,000 depending on the planned investment services.

How long does the licensing process take?

The time schedule for obtaining the SD licence is approximately six to twelve months. Given the current workload of the Czech National Bank, 12 months can be expected.

The administrative fee of the Czech National Bank for the application is CZK 100,000.

What must be submitted to the CNB?

The following documents must be submitted to the Czech National Bank for the SD licence:

  • Information about capital
  • Information about shareholders
  • Information about the management body and managers
  • Information about the business organisation, including:
    • an initial business plan for the following three years, including information on planned regulated and unregulated activities, detailed geographic distribution information and activities to be carried out by the investment firm. Relevant information in the business plan includes:
      • the registered office of potential customers and target investors;
      • marketing and promotional activities and arrangements, including the languages of supply and promotional documents, indicating the member state where the advertising is most visible and popular, the type of promotional documents (to assess where the actual marketing will be predominant);
      • the identity of direct sellers and financial investment advisers and distributors and the geographical location of their business;
    • information about the company's auditors if available at the time of application;
    • organisational structure and the company’s internal control systems, including:
      • information about the persons responsible for internal operations (in the areas of management and supervision), including a detailed curriculum vitae indicating relevant education, training, and professional experience;
      • a description of resources (in particular human and technical) allocated to different planned activities;
      • in relation to the possession of financial instruments and funds of customers, information on any measures to protect the assets of customers (in particular, when financial instruments and funds are held through a custodian, the name of the custodian and the related agreement);
      • an explanation of how the enterprise will comply with the prudential requirements and performance requirements for the business that is relevant to it.
    • information on the status of the application submitted by an investment firm to become a member of the home Member State investor-compensation scheme or evidence of membership of the investor-compensation scheme, if available;
    • a list of positions, services, or activities that are outsourced (or for which there is such an intention) and a list of contracts concluded (or planned to be concluded) with external providers and information on resources (in particular human and technical and the internal control system) allocated to the control of outsourced positions, services, or activities;
    • measures to detect, prevent, or manage conflicts of interest arising from the provision of investment and ancillary services and a description of product control mechanisms;
    • a description of the systems for monitoring business activities, including any back-up systems and system and risk controls, if the enterprise intends to operate algorithmic trading and/or provide direct electronic access;
    • information on the compliance function, internal control, and risk management systems (monitoring system, internal audits, and advisory and assistance functions);
    • data about systems for assessing and managing the risks of money laundering and terrorist financing;
    • business continuity plans, including systems and human resources (key personnel);
    • procedures for the management, the creation and storage of records;
    • a description of the business procedures manual.

How can we help you?

We would be happy to assist you in arranging a securities dealer licence. We can help you prepare complete licensing documentation.

We have extensive experience in obtaining licences from the Czech National Bank. An overview of our experience can be found here: https://www.stuchlikova.com/en/legal-services/cnb-licences/.

If you would like more detailed information or would like to meet with us, please contact us by phone at +420 222 767 393 or via email info@stuchlikova.com.

We offer free initial consultation!