Determination of Public Supervision Aspects and Legal Pillars of Activities of Financial Agents in Central European Countries

Abstract

Financial intermediation can be performed by certain types of financial agents or financial brokers in selected European countries. Using primarily analysis and the comparison, the authors focus on certain legal aspects of distribution of financial services in selected Member States of the EU and the EEA, providing a comparative legal analysis. In Slovakia, it is being focused on the subordinate financial agent. The subordinate financial agent is an entrepreneur entitled to perform financial intermediation. The subordinate financial agent belongs under the delegated supervision of the independent financial agent. The paper deals with a consideration de lege ferenda, a change to the relevant legislation according to which the subordinate financial agents could belong to the supervised financial market entities. The authors provide pros and cons regarding the direct supervision of this entity realized by the National Bank of Slovakia. The paper is being prepared by using analysis, synthesis, the inductive method, the deductive method, and the comparative method. When regulating distribution of financial services on the European level, the Insurance Distribution Directive had played a key role. Mainly due to protection of financial consumers, the subordinate financial agent should belong under the direct supervision of the National Bank of Slovakia.

Distributing financial services by financial agents in correlation with legal and managerial aspects: case study of the Slovak Republic

“…We also take the view that by extending information obligations and, in particular, by transparently informing the client that the subordinated financial agent has started to carry out financial intermediation for another independent financial agent, the protection of the retail client is enhanced (Sidak, Slezáková, Hajnišová & Filip, 2023).…”

“…In accordance with the Decree of the National Bank of Slovakia No 1/2018 of 6 February 2018 on the manner of proving compliance with the conditions for granting an authorisation to act as an independent financial agent and for granting an authorisation to act as a financial advisor, as amended by the Decree of the National Bank of Slovakia No 4/2019 of 1 October 2019 amending the Decree of the National Bank of Slovakia No 1/2018 on the manner of proving compliance with the conditions for granting an authorisation to act as an independent financial agent and for granting an authorisation to act as a financial advisor, the applicant who applies for the relevant authorisation and intends to act through subordinate financial agents, is obliged to demonstrate, in the context of technical and organisational readiness for the implementation of financial intermediation, by means of internal directives how the relationship of the statutory body, or the relationship of the members of the statutory body, the professional guarantor, the applicant's employees, if any, with the subordinate financial agents will be regulated (Sidak, Slezáková, Hajnišová & Filip, 2023).…”

A Critical Analysis of the Rights and Obligations of the Manager of a Limited Liability Company: Managerial Legislative Basis

“…The prohibition of competition is, according to Sidak et al (2023), a form of limiting the executive, in the sense that it limits the potential business of the executive outside the given company. This form of limitation of the duties of the manager is completely understandable, as the manager acquires a lot of information about the company while performing their duties.…”

Public Law Liability of the Financial Market Supervisor

“…One of the main principles of financial market supervision is the principle of effectiveness of supervision. The principle in question means that regulation should not provide legal opportunities to evade supervision and that regulation should not encourage or incentivize entities to do so (Sidak et al 2023). As the limitation of effectiveness is so important, the principles on which financial market supervision is also based are the precise definition of supervisory responsibilities and objectives.…”