Alpaca announced that its regulated investment services have been passported to all 29 countries in the European Economic Area. This move provides fintech companies and financial institutions with a single access point to offer regulated investment products across Europe.
Access throughout Europe via Spanish license
The expansion took place through Alpaca’s Spain-based unit. The unit in question was authorized by the CNMV, the Spanish National Securities Market Commission, under MiFID II. With its regulated operations in the UK, the company will now be able to offer localized investment infrastructure to a market of approximately 500 million people.
Mini dictionary: MiFID II is the framework that regulates investment services and securities markets in the European Union. Passportation, on the other hand, enables an institution authorized in a member country to provide certain services in other European Economic Area countries, following the necessary notification process.
Alpaca offers account management, custody and trading services through its API-based brokerage platform. Thanks to the new structure, business partners will be able to access this infrastructure without having to seek separate licenses in each European country. The company stated that this phase is a continuation of the WealthKernel acquisition and European expansion completed last year.
Alpaca’s access to 29 European Economic Area markets through its regulated unit in Spain allows its partners to focus on product launches while reducing duplication of country-based licensing processes.
It also strengthens its position on the digital asset side
Alpaca; It offers infrastructure for stocks, ETFs, options, bonds and crypto assets. Therefore, the latest expansion also supports the company’s position in the digital asset space. Recently, many crypto companies are turning to establishing regulated investment platforms that combine traditional securities and digital assets under the same licensed umbrella.
For companies developing crypto investment products, working with a regulated infrastructure provider can ease the burden on compliance processes. It can also make it easier to reach customers in multiple jurisdictions. The passporting system in Europe has therefore become one of the prominent models for fintech and crypto companies.
Companies using similar model and new partnership
Companies using this model in Europe include eToro, Interactive Brokers and Trading 212. With a similar framework, Alpaca will be able to offer investment infrastructure to the 29 European Economic Area markets through its regulated Spanish unit, rather than obtaining separate country licenses.
| Title | Before | Later |
|---|---|---|
| market access | The need for a country-based process came to the fore | Access to 29 EEA countries from a single regulatory framework |
| Operation model | Separate approval processes could take time | Faster product delivery is aimed with API-based infrastructure |
| Regulatory basis | Individual country evaluations could stand out | MiFID II passporting system is used |
The company’s latest move aims to reduce the time and regulatory workload required to reach new customers. This way, partners will be able to focus more on product development and distribution rather than re-executing the licensing process in every market.
Companies authorized in a member of the European Economic Area can move a significant part of their regulated services throughout the region after the required notification process is completed.
Alpaca also signed a memorandum of understanding with South Korea’s Eugene Investment & Securities. The deal aims to expand global investors’ access to Korean stocks through the company’s brokerage infrastructure platform.
