CZECH REPUBLIC Law and Practice Contributed by: Ondřej Mikula, Jan Šovar and Markéta Klabouchová, FINREG PARTNERS
comed the highest number of new players in the fintech scene over the course of 2024. Finally, insurtech and peer-to-peer investments, including lending and investment crowdfunding platforms, are also well represented. However, only five companies so far hold a licence under the Crowdfunding Regulation for lending-based models, and one company holds a licence for investment-based models. Although the local fintech market is dominated by start-ups, some legacy players, such as large banking or investment groups, are also active in the sector. While some of them have set up fintech companies to offer innovative solutions in-house, others provide these services by part - The regulatory regime applicable to industry participants in the Czech Republic depends on the particular business model. The main laws applicable under the existing financial services regulatory framework are as follows. • Payment service providers and e-money insti - tutions are regulated by the Czech Payment Services Act (the “PSA” ), which implements PSD2 (Directive 2015/2366) and EMD2 (Direc - tive 2009/110/EC). • Investment firms and investment intermediar - ies are governed by the Act on Capital Market Business (the “CMBA” ), which implements or adapts the legal system in the Czech Republic to a wide range of EU legislative acts such as MiFID II (Directive 2014/65/EU), MiFIR (Regulation 600/2014), the Prospec - tus Regulation (Regulation 2017/1129), MAR (Regulation 596/2014), DORA, MiCA, the DLT Pilot etc. nering with fintech players. 2.2 Regulatory Regime
• Investment funds and management com - panies are subject to the Act on Manage - ment Companies and Investment Funds (the “AMCIF” ), which implements AIFMD (Directive 2011/61/EU) and UCITS (Directive 2009/65/EC). • Lending-based and investment-based crowdfunding providers are regulated by the Crowdfunding Regulation. • Insurance companies and insurance interme - diaries are subject to the Insurance Act and the Insurance and Reinsurance Distribution Act. • Consumer credit originators and intermediar - ies are subject to the Consumer Credit Act. • Most of the crypto-asset service providers are regulated by MiCA. • AML/CFT requirements are laid down in the Act on Certain Measures against the Legalisation of the Proceeds of Crime and the Financing of Terrorism, which implements the fourth AML Directive (Directive 2015/849/EU) (as amended) and in the Act on the imple - mentation of international sanctions, which will be subject to a major overhaul in the coming years in the context of the EU AML/ CFT package adopted in 2024. • The directly applicable EU regulations includ - ing the MiFIR, Prospectus Regulation, MAR,
DORA, MiCA, the DLT Pilot etc. 2.3 Compensation Models
The types of compensation models in the finan - cial industry in the Czech Republic depend on the regulatory status, service type and customer category. Different business models are subject to distinct regulatory requirements, including
disclosure obligations. Compensation Models
The most common models in investment ser - vices are the commission-based and fee-based
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