CZECH REPUBLIC Law and Practice Contributed by: Stanislav Šimek, Vojtěch Mlynář and Jakub Dostál, BADOKH
Soft oversight is also exercised by industry bodies such as the Czech Fintech Association through codes of conduct and best practice guidance. 2.13 Conjunction of Unregulated and Regulated Products and Services Fintech providers may combine regulated and unregu - lated products and services, but the extent depends on their licensing framework. Investment firms may perform other business activi - ties only after registering them with the CNB, provided such activities do not hinder the proper provision of investment services or effective supervisory oversight. The CNB may refuse such registration, limit its scope or impose conditions. Payment institutions may perform other activities only if they do not pose a material threat to the financial stability of the payment institution or hinder effective supervisory oversight by the CNB. 2.14 Impact of AML and Sanctions Rules AML rules apply broadly to Czech fintechs regardless of whether they operate as regulated financial institu - tions or as unregulated service providers. Under current Czech AML rules, onboarding non-EU clients digitally without a physical presence is in prac - tice very difficult. As a result, Czech fintechs seeking to serve non-EU customers tend to establish opera - tions in another jurisdiction better suited to remote onboarding. The EU AML package, applying mainly from 2027, will significantly reshape this framework and should embrace digital onboarding. International sanctions are implemented in Czech law. Czechia is bound to implement EU sanctions regula - tions. 2.15 Financial Action Task Force (FATF) Standards Czech AML rules broadly follow Financial Action Task Force (FATF) standards, as national legislation is built on EU AML frameworks, which are themselves designed to implement FATF recommendations.
Czechia is largely compliant with most FATF recom - mendations. 2.16 Reverse Solicitation Czech law permits reverse solicitation under limited circumstances. The CNB treats reverse solicitation as a narrow exception, not a mechanism for systematic market access. It will scrutinise any prior marketing activity, as such activity will disqualify the exemption entirely. Crypto-Asset Services A third-country firm may provide crypto-asset ser - vices to clients in Czechia if initiated exclusively at the client’s own initiative. This does not entitle the firm to offer new categories of services or assets to that client. The exception does not apply where a third party solicits clients on behalf of the provider, or where services are marketed in Czechia. Investment Services Similar principles apply to investment services. How - ever, foreign investment firms may provide certain investment services to Czech professional clients without triggering full authorisation requirements. Investment Funds A transaction does not constitute an offering of invest - ments where the investor makes the decision to invest entirely on their own initiative. 3. Robo-Advisers 3.1 Requirement for Different Business Models The applicable regulatory framework for robo-advisers depends on the asset class in respect of which ser - vices are provided. Where a robo-adviser provides investment services (eg, investment advice or portfolio management) in relation to financial instruments (eg, shares, bonds or security tokens), it is providing a regulated invest - ment service under MiFID II, implemented in Czech law through the CMUA. A licence from the CNB is usually required, either as an investment firm or, under certain circumstances, as an investment intermediary.
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