PORTUGAL Law and Practice Contributed by: João G Gil Figueira, Rodrigue Devillet Lima and Catarina Andrade Miranda, GFDL Advogados
Government has not yet enacted the domes - tic legislation required to regulate MiCA’s implementation in Portugal or designated the authority responsible for supervising, receiving, and assessing applications for the authorisation of crypto-asset service provid - ers; and • Regulation (EU) 2022/2554 on digital opera - tional resilience for the financial sector – Digi - tal Operational Resilience Act (DORA). The above-mentioned Acts are the foundational framework applicable to most fintechs. Other provisions and regulations may apply, and any entrepreneur in this sector must comply with the ordinances issued by regulators and supervisory authorities that are regularly enacted in light of ongoing developments in sectorial practices. In addition to local laws, regulations and ordinanc - es, EU frameworks also extensively regulate fin - tech activities. 2.3 Compensation Models The Portuguese legal framework does not pro - vide pre-established compensation models or mechanisms for fintechs. Compensation schemes will largely depend on the type of business or project being developed, applicable regulations and type of clients. Rules applica - ble generally stem from the Market in Financial Instruments Directive II ( “MiFID II” ). The compensation models for a fintech project will usually be designed using a commission, fee, or interest loan model. Under the commission model, the industry par - ticipant will draw compensation from the sub - scription or closing of the position of a specific product. Under a fee-based model, the industry participant will collect a fee (fixed or variable) for rendering a specific product or service.
The particulars of each commission or fee model will largely depend on the regulatory landscape covering a given business activity, which, in some cases, may need to be segregated into different vehicles to obtain the practical effect desired by the industry participant. For example, asset management and invest - ment fund companies can draw commissions as established in their management rules. Still, they will not be allowed to charge a commission when a specific fund invests in other funds that the managing company of the fund controls. In the context of payment and e-money institu - tions, there is the possibility of granting loans so long as they are associated with and exclusive - ly granted for the sole purpose of the payment operation requested by the user and so long as the loan is reimbursed within 12 months. In such cases, the payment or e-money institution must ensure that the user disposes of sufficient funds under the ordinances issued by the Bank of Portugal. The main rule to be followed is that the com - pensation model deployed by an industry par - ticipant needs to be transparent, proportionate, explained in detail to the customers or users, and designed so that no conflict of interest aris - es from its application. Compensation model disclosure must occur before entering a contract or transaction (as applicable). 2.4 Variations Between the Regulation of Fintech and Legacy Players There are no main differences between the regu - lation of fintech industry participants and legacy players. The Portuguese legislature has signifi - cantly narrowed the previous legal framework asymmetry between fintech and legacy players by mirroring its EU counterparts and adopting
683 CHAMBERS.COM
Powered by FlippingBook