Portfolio management
Managing client investment portfolios on a discretionary basis under an individual mandate requires an investment firm licence, a fund manager licence or a banking licence under MiFID II Annex I, Section A(4). Authorised discretionary wealth managers can passport across the EEA, and must execute comprehensive client suitability profiles, investment mandates and regular portfolio reporting.
Definition
Managing client portfolios that include financial instruments on a discretionary, client-by-client basis.
- MiFID II, Annex I, Section A(4): official text
Which licence you need
Licence families that typically permit this activity:
- FM · Abu Dhabi Global Market (ADGM)
Financial Services Permission for Managing a Collective Investment Fund (Category 3C)
FSRA
- IF · Australia
Australian financial services licence (AFSL)
ASIC
- FM · Bermuda
Fund Administrator Licence (Part III, Investment Funds Act 2006)
BMA
- IF · Bermuda
Investment Business Licence (standard licence, under the Investment Business Act 2003)
BMA
- FM · British Virgin Islands
BVI mutual fund recognition (private/professional fund), registration (public fund) or approval (incubator/approved fund) - funds are recognised/registered/approved, not 'licensed'
BVI FSC
- IF · Cayman Islands
Securities Investment Business Licence / Registered Person
CIMA
- IF · Cyprus
Cyprus Investment Firm (CIF) authorisation
CySEC
- FM · Czech Republic
Investment Company / Fund Manager licence (povolení k činnosti investiční společnosti)
CNB
- IF · Czech Republic
Investment Firm licence (povolení k činnosti obchodníka s cennými papíry - OCP)
CNB
- FM · Dubai International Financial Centre (DIFC)
Financial Services Permission for Managing a Collective Investment Fund (Category 3C)
DFSA
- FM · Estonia
Operating licence as a fund management company
FI
- IF · Estonia
Authorisation as an investment firm
FI
- FM · France
Société de gestion de portefeuille (SGP) / Portfolio management company authorisation
AMF
- FM · Germany
Investment management company licence (Erlaubnis als Kapitalverwaltungsgesellschaft nach § 20 KAGB)
BaFin
- IF · Germany
Investment firm licence (Erlaubnis zur Erbringung von Wertpapierdienstleistungen nach § 15 WpIG)
BaFin
- IF · Ireland
Investment Firm Authorisation (MiFID II)
CBI
- IF · Italy
Società di Intermediazione Mobiliare (SIM) investment firm licence
CONSOB
- IF · Latvia
Investment firm licence
LB
- IF · Lithuania
Financial brokerage firm licence
LB
- IF · Luxembourg
Investment firm authorisation
CSSF
- IF · Malta
Investment services licence (Category 1, 2, or 3)
MFSA
- IF · Netherlands
Investment firm licence (Vergunning beleggingsonderneming) under Wft Article 2:96 and MiFID II
AFM
- FM · Poland
Investment Fund Company licence (towarzystwo funduszy inwestycyjnych - TFI)
KNF
- IF · Poland
Brokerage House licence (dom maklerski)
KNF
- FM · Seychelles
Fund Administrator's Licence (and Restricted Fund Administrator's Licence) under the Mutual Fund and Hedge Fund Act 2008
FSA
- IF · Seychelles
Securities Dealer's Licence (full or restricted)
FSA
- IF · Singapore
Capital Markets Services (CMS) Licence
MAS
- IF · Slovakia
Investment firm licence (povolenie na poskytovanie investičných služieb pre obchodníka s cennými papiermi)
NBS
- IF · South Africa
Financial Services Provider licence - Category II (discretionary FSP)
FSCA
- FM · Spain
Sociedad Gestora de Instituciones de Inversión Colectiva (SGIIC) licence
CNMV
- IF · Spain
Sociedad de Valores y Agencia de Valores (SV / AV) investment firm licence
CNMV
- FM · Switzerland
Fund management company licence (Fondsleitung nach Art. 32 FINIG)
FINMA
- FM · Switzerland
Manager of collective assets licence (Verwalter von Kollektivvermögen nach Art. 24 FINIG)
FINMA
- IF · Switzerland
Portfolio manager licence (Vermögensverwalter nach Art. 17 FINIG)
FINMA
- IF · Switzerland
Securities firm licence (Wertpapierhaus-Bewilligung nach Art. 41 FINIG)
FINMA
- IF · United Kingdom
MIFIDPRU Investment Firm Authorisation (Part 4A FSMA)
FCA
Where it can be licensed
Frequently asked questions
How does discretionary portfolio management differ from collective fund management?
Discretionary portfolio management operates on an individual client basis, where assets remain segregated in the client's own custodial account under a specific mandate. Fund managers manage pooled collective investment vehicles where investors hold units or shares in a single fund entity.
What suitability obligations govern discretionary portfolio managers?
Before establishing a discretionary portfolio, the manager must assess the client's financial position, investment objectives, knowledge, experience and capacity to absorb losses. The portfolio allocation must remain consistent with the agreed investment strategy and risk profile.
Sources
- MiFID II Annex I, Section A(4) · retrieved 2026-09-24
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