The new procedure helps to avoid situations in which the Estonian Financial Intelligence Unit licences a small fund manager, but the enterprise has yet to register their activity with Finantsinspektsioon. In that case, the Estonian Financial Intelligence Unit cannot be certain of the small fund manager, nor can it mitigate the risks of money laundering and terrorist financing.

According to the Money Laundering and Terrorist Financing Prevention Act, fund managers are considered financial institutions. Therefore, the company must apply for a financial institution's activity license from the Estonian Financial Intelligence Unit (MLTFPA § 70 section 1 subsection 1).