PORTUGAL Law and Practice Contributed by: João G Gil Figueira, Rodrigue Devillet Lima and Catarina Andrade Miranda, GFDL Advogados
2.16 Reverse Solicitation In accordance with Recitals 85 and 111 and Article 42 of MiFID II, as well as Article 314-D of the Portuguese Securities Code, Portugal allows the provision of regu - lated products and services from another jurisdiction under a reverse solicitation basis. This can be done without establishing a branch or obtaining authorisa - tion from the CMVM, as long as the service is provided solely at the client’s initiative. The arrangement must not involve solicitation, promotion aimed at specific client categories, or targeted advertising encouraging particular investors to acquire a specific investment, with or without ancillary services. 3. Robo-Advisers 3.1 Requirement for Different Business Models There is no specific law regulating the services pro - vided by robo-advisers. Therefore, they are likely con - sidered to fall under the definition of order execution, investment advisory services or portfolio management. Usually, robo-advisers are used for trading in tradition - al securities, such as shares, bonds, exchange-traded funds, and other financial instruments regulated under the Portuguese Securities Code and other ordinances issued by the CMVM. Fintechs operating under this model will also be subject to MiFID II rules. Fintech companies looking to deploy robo-advisers that trade both financial instruments and virtual assets will need to obtain a hybrid licence. In Portugal, the Bank of Portugal is the competent authority responsi - ble for authorising activities related to the custody of virtual assets. The Comissão do Mercado de Valores Mobiliários (CMVM) regulates activities involving security tokens. While the compliance requirements for different asset classes may have some similarities, distinct regulatory frameworks will apply based on the specific nature of the assets involved. 3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers Legacy players such as banks and fund management institutions have been paying close attention to robo- advisers. New solutions are expected to be developed in the future, considering the advantages they bring
from a mass investment perspective and the ability to capture many retail investors. In Portugal, Best Bank is one of the retail banks offering a robo-adviser-based solution for investment in financial instruments. Open Bank, another retail bank, offers a digital investment service that provides personalised investment advice and portfolio management. 3.3 Issues Relating to Best Execution of Customer Trades In the event that robo-adviser services fall under the scope of MiFID II, “best execution” obligations require participants to take all sufficient steps to obtain the best possible result for clients. 4. Online Lenders 4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities Lending is an activity reserved for authorised credit and financial institutions, regardless of the type of bor - rower. In general, authorisation by the Bank of Portu - gal is required to grant loans as it is deemed a banking activity. Some forms of peer-to-peer lending would fall within the concept of crowdfunding and be regulated by the CMVM. Depending on the type of loan, such as a consumer or asset-backed loan, rules vary in relation to certain criteria such as effort rates, interest rates and maturity date. Consumer loans are regulated by Decree-Law No 133/2009 of 2 June in line with Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008. The Law on Distance Contracting of Finan - cial Services would also apply. In most cases, a con - sumer can cancel a loan agreement within 14 days. For mortgage-backed loans, the general provisions are provided by Decree-Law No 74-A/2017 of 23 June, which transposes Directive 2014/17/EU of the European Parliament and of the Council of 4 Febru - ary 2014 on credit agreements for consumers relating to residential immovable property. Under the above- mentioned provisions, lenders must refrain from unfair and misleading advertising practices and must pre -
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