Investment Firms
The FMA is responsible for the supervision of investment firms in Liechtenstein and monitors compliance with the Investment Firms Act (WPFG), the Investment Services Act (WPDG), and the Trading Venues and Exchanges Act (HPBG), along with the associated ordinances, regulations, and guidelines.
Pursuant to its Article 2(1) and subject to Article 2(2) and Article 3, the WPFG applies to investment firms authorised under the WPFG. The following core services as set out in Annex 1 Section A WPFG may be provided by investment firms:
- Reception and transmission of orders in relation to one or more financial instruments (Annex 1 Section A(1))
- Execution of orders on behalf of clients (Annex 1 Section A(2))
- Dealing on own account (Annex 1 Section A(3))
- Portfolio management (Annex 1 Section A(4))
- Investment advice (Annex 1 Section A(5))
- Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis (Annex 1 Section A(6))
- Placing of financial instruments without a firm commitment basis (Annex 1 Section A(7))
- Operation of an MTF (Annex 1 Section A(8))
- Operation of an OTF (Annex 1 Section A(9))
The possible ancillary services are governed by Annex 1 Section B WPFG.
The responsibilities and powers of the FMA are set out in Article 58 WPFG. These include granting, revoking, and withdrawing authorisations; granting, modifying, and withdrawing specific permissions in accordance with Regulation (EU) 2022/858 and related exemptions; and punishing administrative contraventions and taking administrative measures.
Ongoing monitoring is ensured on the basis of the reports which investment firms are legally required to submit; direct and periodic contact with the boards of directors and management of the investment firms; and supervisory reviews. With regard to periodic reports and audits of the investment firms' compliance with their legal requirements, the FMA in general relies on audit reports prepared by external auditors serving de facto as an extension of the FMA.
Categorisation of investment firms
A distinction is made between systemically important investment firms and non-systemically important investment firms, depending on their size, type of activities, and inherent risk. Systemically important investment firms (also referred to as "class 1" investment firms) are fully subject to the prudential requirements of the CRD/CRR regime (prudential regime for banks). If an investment firm carries out the core activities mentioned above as set out in Annex 1 Section A(3) or (6) WPFG and the total value of its consolidated assets at individual or group level reaches or exceeds a threshold of EUR 15 billion, the firm is classified as a "class 1" investment firm.
The FMA may also decide to make an investment firm subject to the supervisory regime for banks if it carries out the core activities set out in Annex 1 Section A(3) or (6) WPFG, the total value of its consolidated assets reaches or exceeds a threshold of EUR 5 billion, and it meets the other conditions set out in Article 60(1) WPFG.
In certain cases, if an investment firm is included in the consolidated supervision of a bank, financial holding company, or mixed financial holding company and carries out the core activities referred to in Annex 1 Section A(3) and (6) WPFG, the FMA may, upon application, allow such an investment firm to apply the CRD/CRR requirements.
Institutions that provide services referred to in Annex 1 Section A(3) or (6) WPFG and whose total consolidated assets exceed the threshold of EUR 30 billion now fall under the definition of a credit institution under the CRR.
A further sub-category is provided for within the category of non-systemically important investment firms, namely small and non-interconnected investment firms (also referred to as "class 3" investment firms). "Class 3" investment firms benefit from numerous exemptions from the requirements of Directive (EU) 2019/2034 (IFD) and Regulation (EU) 2019/2033 (IFR) due to their small size, limited activity, and low risk. For categorisation as a "class 3" investment firm, all criteria under Article 12 IFR must be met. Non-systemically important investment firms that do not qualify as "class 3" investment firms fall into the category of "class 2" investment firms.