BaFin

Retail Investor Protection: New Act entered into force

Date: 10.07.2015

On 10 July, the Retail Investor Protection Act (Kleinanlegerschutzgesetz), passed by the Bundestag at the end of April, entered into force. Compared to the original draft, the Bundestag changed in particular the provisions on crowdfunding and advertisements.

The Retail Investor Protection Act introduced new obligations for providers of capital investments. For example, it defined the obligation to draw up a prospectus in further detail and expanded it. In addition, providers must include more information on personal interrelationships and provide the market with specific information even after the offer to the public has been closed. The Act also introduced a minimum term of 24 months for capital investments and tightened the accounting obligations.

BaFin receives more powers

The Act has awarded BaFin additional powers. Now it can, for example, restrict or even prohibit the sale of certain products, review the balance sheets of companies of the unregulated capital market and publish on its website any measures taken against market participants in order to warn investors.

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