BaFin

Arbitration Board under the Investment Code

In addition to its other activities in the handling of customer complaints, BaFin also offers an arbitration board for consumer disputes in relation to provisions pursuant to the German Investment Code (Kapitalanlagegesetzbuch – KAGB). In addition to BaFin, two other organisations also provide dispute resolution functions pursuant to the KAGB. As a consumer, you can request this kind of out-of-court dispute resolution in order to reach an amicable solution to a dispute.

On this page:

Why should I contact a dispute resolution entity?

The dispute resolution entities resolve consumer disputes within the meaning of section 342 (3) of the KAGB, without the need for court proceedings, since this is not necessary for every conflict. The aim is to give consumers an easily accessible, cost-effective, efficient and comparatively quick opportunity to resolve disputes and to find a solution which is acceptable to both parties.

Consumers within the meaning of section 13 of the German Civil Code (Bürgerliches Gesetzbuch – BGB) are natural persons who enter into a legal transaction for purposes that predominantly are outside their trade, business or profession.

When may I consult the dispute resolution entities?

The dispute resolution entities concern themselves exclusively with disputes in relation to provisions pursuant to the KAGB. This means that, for example, as a private investor and customer you can request dispute resolution if an investment company changes its contractual terms and conditions and you do not want to accept this.

Note: you must apply for dispute resolution in writing. A telephone call is not sufficient. For further information on this topic please refer to the Regulation on the Arbitration Board Pursuant to Section 342 of the Investment Code (Kapitalanlageschlichtungsstellenverordnung – KASchlichtV).

Which dispute resolution entity is responsible for me?

For disputes in connection with the KAGB, there are currently three dispute resolution entities:

  • The Ombudsman Scheme for Investment Funds of the BVI (Bundesverband Investment und Asset Management e. V.) is the responsible dispute resolution entity for disputes with companies that participate in the BVI's dispute resolution procedure. A list of participating companies may be found on the website of the Ombudsman Scheme for Investment Funds.
  • The Arbitration Board of Closed-End Funds (Ombudsstelle für Geschlossene Fonds e.V.) is responsible for all disputes with companies that take part in the service and the corresponding dispute resolution procedure. A list of participating companies may be found on the website of the Arbitration Board of Closed-End Funds.
  • BaFin’s arbitration board, meanwhile, is responsible for all disputes in connection with the KAGB which do not fall within the competence of the BVI’s Ombudsman Scheme or the Arbitration Board of Closed-End Funds. BaFin's arbitration board has three arbitrators. They are also independent and not subject to instructions.

If you are unsure which dispute resolution entity is the right one for your case, you can submit your written application to one of the abovementioned entities; it will then forward it to the responsible entity if necessary.

How do I file an application for dispute resolution with BaFin?

Many disagreements can be resolved in direct contact with the company. It is thus recommended that one first try to settle the issue with the company in question – preferably in writing.
If complaining to the company fails to resolve the matter, you can apply for dispute resolution at BaFin. Please submit your application to initiate proceedings in writing to the office of the arbitration board. Include a brief description of the issue. Also provide copies of all documents needed to understand it, such as correspondence, contractual terms and conditions, and cost calculations.

As the party filing the application, you must confirm that

  1. you have not yet referred this matter to any court;
  2. you have not filed an application for legal aid that has been rejected because the intended assertion of legal rights has no reasonable prospect of success;
  3. this matter is not and has not yet been the subject matter of dispute resolution proceedings before another dispute resolution entity or mediation body responsible for dispute resolution;
  4. you have not reached an out-of-court settlement with the respondent.

All of the above conditions must be fulfilled for dispute resolution proceedings to take place.

Please use the arbitration form, which can be downloaded from the BaFin website, for your application. Fill out the form as completely as possible. Once you have completed the application form, please print and sign it. You should then send your application and the required documentation by post to

Bundesanstalt für Finanzdienstleistungsaufsicht
Schlichtungsstelle nach dem Kapitalanlagegesetzbuch
- Referat ZR 3 -
Graurheindorfer Straße 108
D-53117 Bonn
Germany

You may also send BaFin your completed application and the required documentation by e-mail or fax.

May an application for dispute resolution be denied?

Yes. The arbitrator may reject dispute resolution by notifying the applicant in writing, if

  1. the person filing the application is not a consumer within the meaning of section 13 of the BGB;
  2. the subject matter of the application is not related to the provisions of the KAGB;
  3. the subject matter of the application is pending before a court, was brought before a court in the past or is brought before a court by the applicant during the course of the dispute resolution proceeding;
  4. the dispute has been settled out of court;
  5. an application for legal aid has been rejected because the intended assertion of legal rights has no reasonable prospect of success;
  6. the matter is or has already been the subject matter of dispute resolution proceedings before another dispute resolution entity or mediation body responsible for dispute settlement; or
  7. the claim being filed is time-barred and the adverse party refers to the statute of limitations.

This is laid down in section 4 of the KASchlichtV.

How are the dispute resolution proceedings handled?

The office of the BaFin arbitration board confirms the receipt of your application for dispute resolution, examines the documents submitted and requests submission of additional documents, if necessary.

If the examination shows that your submission may be admitted, the office of the BaFin arbitration board forwards it to the company in question. The company then has one month to make a statement on your problem. You will be informed of this.

The office will forward the company’s statement to you.

If the company in question declares in its statement that it will settle your matter, the office will inform you that the dispute resolution procedure is thus completed.

However, if, in its statement, the company declares that it will not settle your matter, the office will then inform you that you may comment on this response within one month. After expiration of the one-month period, the office then presents the case to the responsible arbitrator.

The arbitrator will take a decision on the basis of the documents submitted by both sides in the proceeding thus far. If the arbitrator decides it is necessary, he or she may request that the parties make additional statements or provide more information. The arbitrator does not take evidence unless evidence can be taken from the parties by submission of documents.

The dispute resolution process

Arbitration process BaFin Arbitration process

What does the dispute resolution proposal mean for me?

Working on the basis of the information submitted by the parties involved, the arbitrator will produce a written proposal of how the dispute can be settled and state brief reasons for this. Both sides then receive the proposal.

They must then decide whether to accept the decision proposed and provide the decision in writing within six weeks. After expiration of the six-week period, the dispute resolution entity informs the parties involved of the result.

This ends the dispute resolution proceedings. If one of the parties involved does not accept the result of the dispute resolution, it may still take legal action. This means that you, as a consumer, may bring the matter before the courts.

In such cases, some courts will demand that the claimant submit a certificate of failed attempt at settlement (see section 15a (3) sentence 3 of the Introductory Act for the Code of Civil Procedure Rules (Gesetz betreffend die Einführung der Zivilprozessordnung – EGZPO)). If no settlement is reached between the parties, the notification of the dispute resolution entity is deemed a corresponding "certificate pursuant to section 15a (3) sentence 3 of the EGZPO".

May I also hire a lawyer?

Yes, although representation by a lawyer is not necessary for the dispute resolution procedure. You may, however, have yourself represented by a third party, for instance a lawyer, if you wish. However, please note that in this case you will be responsible for bearing the costs of legal representation.

Can I obtain legal advice from BaFin's arbitration board?

No. The arbitration board may not provide you with general legal information. The right to provide such information is reserved by law for professionals qualified to do so, in particular registered lawyers.

How much does dispute resolution cost?

Dispute resolution proceedings conducted by the arbitration board are free of charge for the applicant. However, expenses such as postage, telephone charges, photocopying or costs of legal counsel are not reimbursed to you.

How can I contact the dispute resolution entities?

You can contact the dispute resolution entities at the following addresses:

  • BVI-Schlichtungsstelle
    Büro der Ombudsstelle des BVI
    Bundesverband Investment und Asset Management e. V.
    Unter den Linden 42
    D-10117 Berlin
    Germany
    Phone: 0049 (0) 30 6 44 90 46 - 0
    Fax: 0049 (0) 30 6 44 90 46 - 29
    E-mail: info@ombudsstelle-investmentfonds.de
    Website: www.ombudsstelle-investmentfonds.de
  • Ombudsstelle Geschlossene Fonds e. V.
    Postfach 64 02 22
    D-10048 Berlin
    Germany
    Phone: 0049 (0) 30 257 616 90
    Fax: 0049 (0) 30 257 616 91
    E-mail: info@ombudsstelle-gfonds.de
    Website: www.ombudsstelle-geschlossene-fonds.de
  • Schlichtungsstelle der BaFin
    Bundesanstalt für Finanzdienstleistungsaufsicht
    Schlichtungsstelle nach dem Kapitalanlagegesetzbuch
    - Referat ZR 3 -
    Graurheindorfer Straße 108
    D-53117 Bonn
    Germany
    Phone: 0049 (0) 228 4108-0
    Fax: 0049 (0) 228 4108-6229

updated on 23.03.2016

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