Investor Compensation Act
|Title:||Investor Compensation Act|
|Previous title:||Deposit Guarantee and Investor Compensation Act|
|Scope:||Federal Republic of Germany|
|Legal matter:||Securities law|
|Issued on:||July 16, 1998
( Federal Law Gazette I, p. 1842 )
|Entry into force on:||August 1, 1998|
|Last change by:||
Art. 3 G of December 12, 2019
( Federal Law Gazette I p. 2602, 2624 )
|Effective date of the
|January 1, 2020
(Art. 20 G of December 12, 2019)
|Please note the note on the applicable legal version.|
The German Investor Compensation Act ( AnlEntG ) of July 16, 1998 regulated the minimum requirements for the deposit guarantee systems of German credit institutions , in particular protection of 100,000 euros per customer and institution.
The law implemented the Deposit Protection Directive of 1994 and the Investor Compensation Directive of 1997 into German law with effect from August 1, 1998.
On July 2, 2014, a new European Deposit Protection Directive came into force, repealing the 1994 directive and aiming for maximum harmonization in the member states .
With the law to implement this new deposit protection guideline, the term Deposit Protection and Investor Compensation Act (EAEG) was replaced by the term Investor Compensation Act (AnlEntG) on July 3, 2015 and an independent Deposit Protection Act (EinSiG) was passed.
From the previous Deposit Protection and Investor Compensation Act, all payments for deposit protection have been deleted.
Goals of the law
The law protects
- 100% of the deposits, a maximum of the equivalent of 100,000 euros
- 90% of the liabilities from securities transactions, a maximum of the equivalent of 20,000 euros
per customer and institute (Section 4 (2) AnlEntG).
To this end, the law obliges the institutes to secure customer deposits within the meaning of Section 1 (2) of the AnlEntG and liabilities from securities transactions within the meaning of Section 1 (4) of the AnlEntG. The addressees of the law are essentially credit institutions and securities trading companies. If the Federal Financial Supervisory Authority (BaFin) determines the event of compensation (Section 1 (5) of the AnlEntG) , the compensation scheme to which the institution belongs fulfills the customers' protected claims.
The AnlEntG describes in detail the prerequisites for claiming compensation and, in particular, the exact procedure. In addition, Article 12 of the law contains an exception to the obligation to become a member of a compensation scheme for institutions that are affiliated to the security schemes of the regional savings and giro associations or the security scheme of the Federal Association of German Volksbanks and Raiffeisenbanks (institutions that secure institutions).
At the Kreditanstalt für Wiederaufbau , compensation institutions have been set up in accordance with this law to ensure deposit protection. These compensation institutions are after
- private law institutes
- public law institutes and
- other institutes
They are financed through contributions from the affiliated institutes. If necessary, special levies can be requested. The tasks of these compensation institutions can also be carried out by other suitable institutions.
- for private banks: Compensation Scheme of German Banks GmbH (EdB)
- for the public banks: Compensation scheme of the Federal Association of Public Banks in Germany (EdÖ)
- For securities trading companies : Compensation scheme of securities trading companies (EdW)
In the event of the unavailability of deposits at credit institutions, the Deposit Protection Directive provides for these deposits to be protected by a deposit protection system for a limited amount of money. The prevention of payment difficulties or bankruptcy of credit institutions serves the banking supervision, but nevertheless the past has shown that despite banking supervision, the economic distress of institutions cannot be completely prevented. The main aim of the deposit guarantee line is to increase the stability of the banking system and the protection of savers.
As a result of the Deposit Protection and Investor Compensation Act, which came into force in 1998 and was amended on July 1, 2009, deposits and liabilities from securities transactions in private banks and building societies are covered by the compensation scheme of German banks GmbH (EdB) in addition to any other security schemes to the extent provided by law protected. All private individuals as well as partnerships and small corporations are entitled to compensation. The deposits of banks and financial service providers, insurance companies and corporations are not protected. The EdB security limit is 100,000 euros per depositor. In addition to all types of deposits - mainly sight, time and savings deposits - deposit protection also includes savings bonds made out in the name. Liabilities for which a bank has issued bearer securities, such as bearer bonds and certificates of deposit, are not protected. If the deposits and depositors are not fully protected by the EdB, this is covered by the deposit protection fund. The loaned compensation institutions are subject to the Federal Financial Supervisory Authority (BaFin), which can issue orders to prevent grievances and carry out audits.
Procedure in the event of compensation
The Federal Agency determines the compensation event and publishes it in the Federal Gazette. The creditors will be informed immediately of the occurrence of the compensation event and the institution must take all precautions to compensate all creditors within three months. The customer must notify the EdB in writing of the claim for compensation within one year after notification of the compensation event, otherwise the claim for compensation does not apply. The compensation scheme then examines the registered claims and, after determining whether the claims are justified, compensates them within a period of three months (the period can also be extended by a further three months). With the fulfillment of the compensation claim, the claims against the institute are transferred to the EdB. Since both the Deposit Protection Directive and the Investor Compensation Directive each provide for a maximum compensation of EUR 100,000, a customer can theoretically receive a maximum of EUR 120,000 as compensation in the event of the insolvency of a bank that conducts both the deposit business and the securities business. The total is 100,000 euros as compensation for lost deposits and a further 20,000 euros for ownership of securities lost due to the bankruptcy of an institution. In practice, however, these limits are of no significance for the customers of most banks, as they usually organize additional customer protection through their associations that goes well beyond this minimum framework, so that the normal customer receives 100 percent reimbursement of claims in the event of the bankruptcy of his bank . The “double compensation” described above is out of the question for securities trading companies. They only hold funds and no deposits, so they only fall within the scope of investor compensation, not also that of deposit protection.
Institutions that secure institutes
Section 12 (1) of the AnlEntG provides that institutions that are affiliated to the security schemes of the regional savings and giro associations or the security scheme of the Federal Association of German Volksbanks and Raiffeisenbanks do not have to belong to any compensation scheme as long as these security schemes are the affiliated institutions themselves based on their statutes protect, in particular ensure their liquidity and solvency, and have the necessary funds at their disposal (institution-protecting institutions). At the same time, the institutions that secure institutions are also subject to supervision and review by BaFin.
All member banks of the BVR are included in the protection scheme of the Federal Association of German Volksbanks and Raiffeisenbanks , i. H. Volksbanks and Raiffeisenbanks , savings and loan banks , PSD banks , Sparda banks , church credit unions, the cooperative central bank DZ Bank and mortgage banks as well as other special institutions of the FinanzVerbund such as Bausparkasse Schwäbisch Hall . All savings banks, Landesbanken and Landesbausparkassen are connected to the Sparkassen-Finanzgruppe's security system. It consists of security institutions that are united under the statutes to form a liability association. Specifically, these are 11 regional savings bank support funds, the security reserve of the Landesbanken and Girozentralen as well as the security fund of the Landesbausparkassen.
The institute security institutions protect the existence of the affiliated institutes on the basis of their respective statutes. In the event of a crisis, the institution concerned is supported by restructuring measures taken by the respective protection scheme and placed in such a way that it can always fully meet its contractual and legal obligations. The claims of depositors, in particular from savings, sight and time deposits as well as from bonds issued by a member institution in the possession of non-banks, are thus comprehensively secured. The financial means necessary for security are provided by contributions from the affiliated institutes.
According to Section 2 AnlEntG, financial services and credit institutions as well as capital management companies are obliged to secure their liabilities from securities transactions by belonging to a compensation scheme. Sections 3–5 of the AnlEntG regulate compensation claims and procedures.
Deposit Protection Act (EinSiG) of 2015
According to § 1 EinSiG, the CRR credit institutions are obliged to secure their deposits by belonging to a deposit guarantee system . The claim for compensation is acc. Section 6 (1) and (2) EinSiG limited in amount to the equivalent of 100,000 euros (coverage), up to a maximum of 500,000 euros.
- ↑ Directive 94/19 / EC of the European Parliament and of the Council of May 30, 1994 on EUR-Lex deposit guarantee schemes, accessed on November 23, 2019
- ↑ Directive 97/9 / EC of the European Parliament and of the Council of March 3, 1997 on systems for the compensation of investors EUR-Lex, accessed on November 23, 2019
- ^ Draft of a law for the implementation of the EC Deposit Protection Directive and the EC Investor Compensation Directive BT-Drs. 13/10736 of May 20, 1998
- ↑ Directive 2014/49 / EU of the European Parliament and of the Council of April 16, 2014 on deposit guarantee schemes (new version) OJ. L 173/149 of June 12, 2014
- ↑ BaFin : Deposit protection: New directive to better protect depositors in the EU September 1, 2014
- ↑ Article 2 of the Acts for the Implementation of Directive 2014/49 / EU of the European Parliament and of the Council of April 16, 2014 on Deposit Guarantee Systems (DGSG Implementation Act) of May 28, 2015, Federal Law Gazette I, p. 786, 803
- ↑ BaFin : Deposit protection: New law in effect July 3, 2015
- ↑ Investor compensation deposit insurance portal of the Federal Association of German Banks , accessed on November 23, 2019
- ↑ Deposit protection in Germany Deutsche Bundesbank , Monthly Report December 2015, pp. 51–65