LIECHTENSTEIN Law and Practice Contributed by: Christian Inmann and Markus Stelzl, Inmann Stelzl & Partner Attorneys at Law Partnership
diligence, transaction monitoring, reporting of suspi - cious activities, and sanctions screening. The FMA supervises compliance for regulated enti - ties, including banks, payment institutions, e-mon - ey providers and crypto-asset service providers. Liechtenstein also applies FATF-aligned risk-based approaches, requiring both regulated and, in certain cases, unregulated fintechs to implement proportional measures based on the risk profile of their customers and services. 2.16 Reverse Solicitation Under Liechtenstein law, reverse solicitation is gen - erally recognised, meaning that otherwise-regulated products or services may be provided from another jurisdiction without automatically triggering domestic licensing requirements, provided the initiative for the business comes from the client in Liechtenstein rather than the service provider. 3. Robo-Advisers 3.1 Requirement for Different Business Models As Liechtenstein law is technology-neutral and prin - ciple-based (substance over form), all robo-advisers must comply with the regulatory framework applicable to their activities, including licensing, AML and inves - tor-protection obligations. The business model of a robo-adviser depends on the asset classes it serves. • For security tokens, which are classified as finan - cial instruments under MiFiD II, providers must comply with all investment service obligations, including suitability assessments, appropriate - ness tests and client disclosures. Clients must be informed of the degree of human involvement and the data sources used to generate advice. • For crypto-assets, robo-advisers must implement MiCAR-specific suitability and risk management obligations, reflecting the higher risk and specula - tive nature of these assets. In addition, MiCAR includes specific rules that differ from those in
MiFID II, which robo-advisers must carefully con - sider and implement. 3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers In Liechtenstein, legacy players are increasingly adopting solutions pioneered by robo-advisers, par - ticularly in automated portfolio management, digital client onboarding and algorithm-driven investment advice. Local robo-advisers, such as those offering automated wealth management or crypto-related investment services, have demonstrated the poten - tial of digital, algorithm-based advisory models, which legacy players now integrate into their own offerings. Many established banks implement modular robo- advisory solutions rather than overhauling their entire business model, combining automation with human oversight to ensure regulatory compliance. 3.3 Issues Relating to Best Execution of Customer Trades Regulated financial service providers using robo- advisers are required to ensure that client orders are executed in a manner that delivers the best possi - ble outcome. This obligation covers multiple factors, including price, costs, speed, probability of execu - tion and settlement, size and the characteristics of the transaction. These rules must also be implemented for robo-advisers. However, for robo-advisers managing both traditional and digital assets, meeting best execution require - ments presents particular challenges. Automated systems must be designed to continuously monitor execution quality, especially for less liquid instruments or highly volatile crypto-assets. Execution of crypto- assets can be complex, which requires clear policies on how prices are sourced and which trading venues are used, including unregulated platforms. Algorithms may also favour certain execution venues for efficien - cy, which could create potential conflicts of interest that must be identified and managed.
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