In most EU member states, small-scale financial activities are regulated by the national state central bank, financial supervisory authorities or by separate departments of police and tax authorities. Among others, small-scale financial institutions include below list of activities needed to be registered within competent authorities or require operating license.
Investment consulting - one of the most demanded activities of a small-scale financial institution. Investment decisions are often based on investment advice and investment strategy. This area requires high standards to maintain investor confidence. These standards relate to the objectivity, discretion and individuality of those who prepare and disseminate investment advice. In different EU member states, there are a number of minimum requirements for companies interested in providing investment consulting services. For example, in Germany companies providing such a range of services fall under the regulation of the securities law (Wertpapierhandelsgesetz - WpHG) and are required to register their activities with the financial supervisory authority BaFin. The same law regulates the activities of large-scale brokerage companies. However, the requirements for investment consulting companies are much softer and it takes less time for the license acquisition. Meanwhile, in Estonia a license for activity is issued by the Financial Intelligence Unit (Police and Border Guard department) and is regulated by the Law on Combating Money Laundering and the Terrorism Financing, which distinguishes Estonia from other countries where regulation is carried out exclusively by the higher financial supervision authorities.
Requirements for small financial institutions may differ depending on the jurisdiction. However, the main ones include an application for the license, drafts of internal documents and rules on compliance with legislation in the field of combating money laundering and terrorism financing. It is also necessary to provide data on the actual places of service provision, contact persons, and company management. Company shareholders and directors should have an impeccable business reputation and have no prior criminal offences.