Those planning to establish a financial company in Portugal should keep in mind that they’ll be required to put in place internal control systems which:
- are applicable to all subsidiaries of a financial entity;
- depend on an entity's activities, risks associated with an entity’s activities & delegation/centralization of authority in an entity.
Internal control systems must prevent & offset any negative impacts arising from violations of financial legislation, contractual obligations, customer relations & rules of conduct.
Creating a financial institution in Portugal also requires maintaining documentation related to strategies, procedures, systems & policies related to a specific institution.
Those looking to set up a business in Portugal should also familiarize themselves with the main functions performed by internal auditors, namely:
- preparing an audit plan;
- providing recommendations & monitoring their implementation;
- preparing & submitting an annual audit report.
Directors have two main responsibilities:
- exercising caution with regard to their company's activities;
- ensuring that their company’s best interests are served.
Those seeking to obtain a financial services provider license in Portugal should keep in mind that directors may bear responsibility for failure to comply with their duties. They may also be held responsible for damages arising from their actions or violations of contractual/legal obligations. Directors may be excluded from liability if it’s proven that they acted in good faith & didn’t pursue personal interests.
Directs may also be held liable for regulatory violations if it’s proven that they were aware of them but didn’t take steps to rectify the situation.
Those considering obtaining a financial mediator license in Portugal should keep in mind that they’ll have to request permission for using financial instruments registered in the name of non-professional clients. If investment services are provided to professional clients, the latter are deemed to have the experience & knowledge required for using financial instruments, conducting transactions & providing financial services in Portugal.
Portugal: Regulation of Financial Services
Regulation of the Portuguese financial sector plays a key role in determining the attractiveness of financial services rendered by the country’s financial institutions.
The BoP & CMVM are the two main bodies responsible for regulation of financial services in the Portguese Republic. The former is required to advise the government on economic & financial sectors, while the latter is responsible for advising on development of policies related to financial markets, instruments & institutions.
Looking to register a financial company in Portugal? Need advice on regulation of financial services in the Republic of Portugal? Why not reach out to IQ Decision UK?