Proposal for the amendment of the financial system mediator right a double-edged sword? Gottingen, February 21, 2011 – the Federal Ministry of Economics and technology and the Federal Ministry of finance have put forward the announced draft of law on the amendment of the financial investment intermediaries and investment law on February 17, 2011. With the law, gaps in hitherto little-regulated product areas such as closed funds shall be eliminated to ensure a uniformly high level of protection especially for private investors. In the distribution of financial products, the same rules of the game thus apply to banks and free agent. The new rules of the investors strengthen legislation is now also for so-called assets”such as closed-end funds, silent partnerships and participatory rights provided by product information sheet to the introduction, provide essential information about risks, capital earnings Outlook and costs the investors. In addition are the applicable only to banks information, consulting and documentation requirements of the German Securities Trading Act are extended to the commercial financial investment intermediaries. “This means that they need to create in future consultation protocols, leaflet” hand and disclose their commissions.
Also, the supervision of the financial system mediator will be strengthened. For all products, which belong to the assets, classified in the future – as have stocks and bonds – as financial instruments, so that a permission of the Federal Agency for financial services supervision (BFin) is required for their mediation in the future. This should be unnecessary if only assets are conveyed. Then, the labour inspectorate takes over the monitoring of intermediaries. Increased requirements for commercial financial intermediaries will be introduced with the new law. In the future, a certificate of competence is required, which is to provide through a competence test, and is a professional indemnity insurance to complete.
The transitional period for already active intermediary is be twelve months. According to Matthias Gundel, Managing Director of the firm GK-law.de, specialising in capital markets law, the devil is in the different supervisory arrangements, as always in detail. Because if also investment funds are taught by intermediaries – as usual – in addition to assets, no exclusivity of a certain product group is more according to the current state of legislation. The mediators are subject to no longer the Labour Inspectorate, but banking supervision. For the investor, but this won’t make any difference because in the future the consulting and documentation requirements of the securities trading Act apply to all products. The mediator would have to decide, however, for the one or the other product group so Gundel next, to go significantly beyond the requirements of the Labour Inspectorate duties one below intermediary banking supervision from the start out of the way. The extension of the Labour Inspectorate for financial investment intermediaries, celebrated as a victory by the industry participants could thus as a boomerang for the product providers turn out.