Considered Europe’s major business hub, Monaco traditionally attracts hosts of entrepreneurs wishing to render financial services in the EU. There’s a good chance that you’re one of them and are now contemplating registering a banking company in Monaco. If you are, then you’re highly recommended to closely scrutiny information presented below.
Monaco: Regulation of Private Banking
Setting up a company in Monaco involves getting acquainted with different types of contracts. Let’s have a closer look at two of them, and more specifically, wealth management & private banking ones.
When it comes to private banking agreements, they must include:
- advisory agreements - enable clients to get customized investment advice;
- account contracts & securities account contracts - enable clients to deposit their securities & funds with Monaco-registered lending companies;
- management mandates - enable AMCs to handle their clients’ foreign currency assets & manage their financial instruments;
- order transfer mandates - make it possible to transfer orders.
Parties negotiating signing an agreement can choose applicable laws pursuant to mandatory provisions of Monegasque law.
Monaco-registered financial institutions must comply with the following requirements:
- provide their clients with advice & information;
- identify potentially fraudulent activities capable of negatively impacting clients’ accounts;
- inquire about clients’ goals, financial situation & investment experience prior to concluding an agreement.
Services offered by financial institutions must be tailored to their clients’ financial situation & their experience with financial products. Authorized companies must also provide all information required by their clients.
Contracts concluded between clients & companies must include:
- types of financial instruments used;
- compensation-related clauses;
- procedure for contract prolongation;
- channels of communication with customers through which they’ll be notified of upcoming transactions & operations with their assets;
- mandate’s duration.
In cases where mandates allow for transactions involving borrowed funds, Monaco-registered financial institutions must secure their client’s consent & include it in a specially drafted contract. Contracts like this must contain conditions which must be met in order to perform certain operations; they should also provide information on ways of notifying clients. Also, mandates must contain information risks associated with specific transactions.
Lending institutions don’t normally allow to withdraw money or securities at the initiative of AMC's The only exception is made in cases unless clients issue a PoA which must be renewed for each & every transaction.
Monaco: Dispute Resolution
There’s a 5-year prescriptive period for cases involving civil claims. There’s also a specific deadline for services provided by banking institutions. Private banking contracts provide for a period of 1 to 6 months for contesting transactions.
Establishing a financial company in Monaco involves indepth study of local legislation. You can save time & effort by contacting IQ Decision UK & letting us handle all your legal issues. Our legal experts will be happy to provide you with legal advice at all stages of business registration in Europe.