Investment intermediaries

Jan 14, 2019

Who can apply?

A permission for investment intermediary can be obtained by the CNB to a trading company or to a natural person.

Requirements for an investment intermediary

Terms and Conditions for a Legal Entity:
  1. the seat and actual seat of that company is or should be in the Czech Republic,
  2. the company is trusted; this is not considered, if the company is not yet incorporated in the Commercial Register,
  3. the initial capital of that company is transparent
  4. only persons who are credible and didn’t involved in the legalization of proceeds of crime and terrorist financing can be in the company,
  5. the close linking of that company with another person does not prevent or hinder effective supervision of the investment intermediary; in a close relationship with a person who has its registered office or a registered office in a State which is not a Member State of the European Union, the law of that State and the manner of its application, including the enforceability of the right,
  6. the business plan of the company:
    1. defines and covers the planned scope of activity of the investment intermediary,
    2. is supported by real economic calculations and
    3. defines the activities which it intends to delegate to another, including information on whether and to what extent employees and tied agents intend to use,
  7. that company has or will have, at the latest on the commencement date of its business, to the extent it intends to perform the business of an investment intermediary, factual, personnel and organizational prerequisites for the proper performance of the investment intermediary's activity enabling the fulfilment of its business plan and the fulfilment of the obligations of the investment intermediary, in particular in the area of customer negotiation rules and the prudent provision of investment services, including:
    1. organizational arrangements,
    2. checks on the persons through whom he acts as an investment intermediary, and
    3. ensuring that the persons with whom it acts as an investment intermediary are fully entitled, trusted and professionally competent,
  8. the governing body of that company and its members fulfil the requirements for the exercise of functions; and
  9. company is or will be insured at the latest on the date of commencement of the business.
Terms and conditions for a Natural Entity:
  1. the residence, registered office and actual seat of that person is or should be in the Czech Republic,
  2. that person is fully entitled, trusted and professionally competent,
  3. business plan of that person:
    1. defines and covers the planned scope of activity of the investment intermediary,
    2. is supported by real economic calculations and
    3. defines the activities which it intends to delegate to another, especially his employees and tied agents,
  4. that person has or will have, at the latest at the commencement date of the business, the extent to which he intends to perform the business of the investment intermediary, factual, personnel and organizational prerequisites for the proper performance of the activity of the investment intermediary, enabling the fulfilment of its business plan and the fulfilment of the obligations of the investment intermediary, especially in the area of the rules of negotiations with the clients and the rules of prudent provision of investment services, including
    1. organizational arrangements, including arrangements to ensure proper and prudent management, taking due account of customer interest and market integrity
    2. control of the persons through whom he acts as an investment intermediary and
    3. ensuring that the persons with whom it acts as an investment intermediary are fully entitled, trusted and professionally competent,
  5. that person is or will be insured, at the latest on the date of commencement of the business,
  6. that person has a data box,
  7. that person is not a member of the management body of the person who handles the instructions as an investment intermediary.

How long does the licensing process take?

The Czech National Bank shall decide on the application within 3 months from the date of filing the application. In complicated cases it can be extended by three other months. The application must have all the prescribed requirements and must be without fault. The submission fee is 10,000 CZK.

The duration of the license

An authorization to operate an investment intermediary is valid until the end of the calendar year following the calendar year in which the decision to grant such authorization comes into force. If the intermediary subsequently wants to perform the activity of an investment intermediary, he must apply for an extension, which is granted for the next 12 months and pay an administrative fee of 5,000 CZK.

How can we help you?

We would be happy to assist you in arranging an Investment intermediaries’ permission. 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.