Thierry Crovetto, National Council member and Legislation Committee Chairman, is the rapporteur of the bill for the creation of Multi Family Office operations on behalf of the Finance and Economy Commission. He is also chairman of the management company TC Stratégie Financière SAM and a IUM Master of Finance lecturer. We met him to outline the framework of this Multi Family Office bill and its implications.
When does the bill initiative go back to?
The proposed law on the operation of Multi Family Offices (M.F.O.) dates from 2013, it was transformed at the end of the late 2015 regulatory deadline and will be voted in the Upper Chamber on 29 November 2016.
What is the purpose of the act?
This bill allows quality wealth management services to be offered to customers who are resident in Monaco or abroad.
The purpose of this bill is to recognise the existence and regulate the exercising of the activity of Multi Family Offices, defined in this bill as a professional activity consisting of “providing advice and services of a wealth management and financial nature to natural persons, families, or legal entities belonging to natural persons or families or of which they are founders or beneficiaries”.
The bill subjects the carrying out of this profession to a set of strict rules to ensure high level protection for the customers of these Multi Family Offices.
Do Single Family Offices (S.F.O.) not fulfil this role?
It is considered that only fortunes in excess of 100 or 200 million euro can create an S.F.O.
There is a segment of people with assets of 20 to 100 million euro who have less interest in creating their own S.F.O. but are seeking a bespoke service. An M.F.O would be a solution for them, by responding to global demand, like a coordinator or conductor, for example concerning both taxation and their private affairs.
Would Multi Family Offices be subject to control?
An M.F.O is subject to the Minister of State issue of a prior authorisation, as well as approval by the Financial Activities Control Commission if it performs financial activities. Moreover, its professionals are subject to professional secrecy.
Given the entity of the financial stakes, the bill obliges professionals to use a corporate form which provides guarantees of stability and performance, and thus to set up Monegasque public limited companies with a 300 K euro minimum capital if the M.F.O offers financial services but only 150 K€ if not. Note that in no case may a bank or management company be a majority shareholder.
Finally, M.F.O. may not manage portfolios - in over to avoid any conflicts of interest by being judge and defendant - but solely provide advice and order transmission.
And in terms of their payment?
They are paid exclusively by their customers, as independence must prevail. This prohibits any retrocession of providers. It is a guarantee of safety and seriousness for customers.
Will M.F.O promote the Financial Centre’s attractiveness?
Absolutely, they may encourage new residents to come to Monaco. The profession is very appropriate for the Monegasque financial centre and will incite people to take up residence and use Monegasque providers. All professions will benefit, banks included. The M.F.O needs to become a true label, a symbol of independence, expertise and safety.
