Declaration of suitability
The suitability statement ( english suitability report ) is banking one of the investors in the context of investment advice from investment advisers in writing made available explanation is presented in which the service provided investment advice and explains and clarifies how the advice to the preferences , investment objectives and other features of the Investor was voted.
General
The previous consultation protocol , which pursued similar purposes, has been omitted and is replaced by the declaration of suitability. Since January 2018, only private investors have received a so-called suitability declaration following investment advice. Credit institutions and financial services institutions are obliged to do this on the basis of the second European financial market directive ( MiFID II ) and the German implementation law (Second Financial Market Amendment Act - 2. FiMaNoG).
In the statement, banks must represent in writing why the recommendation from - for example, a financial instrument or financial product to buy, hold or sell - matching the respective customers, so this is appropriate. On the one hand, this means that the financial instrument or service must match the investor's risk attitude. On the other hand, the investor must be able to understand the functioning and the risks of the recommendation. For this, the investment advisor must inquire about the knowledge and experience of the client, his general financial education , his financial situation and investment goals and check his investment recommendation based on the information.
Legal issues
The legal basis for the suitability declaration is Section 64 (4) WpHG , according to which an investment services company must provide private customers with a written declaration on the suitability of the recommendation on a permanent data carrier after the investment advice has been given before the contract is concluded. A suitability declaration must be made available both if the recommendation is aimed at buying or selling, as well as for holding recommendations. The suitability declaration must state the advice provided and explain how it was tailored to the preferences, investment objectives and other characteristics of the client. The investor must have received the declaration before concluding the securities order.
Further details are regulated in Art. 54, Paragraph 12 of Delegated Regulation (EU) 2017/565 . According to this, in the case of investment advice, the credit institutions must send the retail investor a report with an overview of the advice given and information on the extent to which the recommendation made fits the retail investor in question, which also includes information on the extent to which it relates to the goals and personal circumstances of the customer the required investment period, the knowledge and experience of the customer as well as his risk tolerance and loss-bearing capacity. The credit institutions must draw the customers' attention to this and state in the suitability declaration whether they require the recommended financial instruments for the retail investor to have their provisions checked regularly. If a credit institution provides a service that is accompanied by regular suitability assessments and reports, the follow-up reports after the first service provision may only relate to changes in the relevant services or financial instruments and / or the circumstances of the investor, while all details of the first report may not be repeated are to be listed.
According to Art. 55 of the Delegated Regulation (EU) 2017/565, the credit institutions must ensure that the information on the knowledge and experience of an investor in investment matters covers the following topics:
- The types of services, deals and financial instruments that the investor is familiar with;
- Type, scope and frequency of the investor's transactions with financial instruments and the period in which they were carried out;
- Educational level and occupation or relevant previous occupation of the investor.
The investor's knowledge and experience are an essential part of the suitability declaration and meet the requirements of the Federal Court of Justice (BGH) for advice that is “ appropriate for the investor ”.
Legal consequences
The suitability declaration does not just contain the mere determination that a financial instrument is suitable. The WpHG expressly requires that it must also include the reasons why the financial instrument is suitable, i.e. to what extent the investment advisor has tailored the selection of financial instruments to the customer's wishes . To do this, he must qualitatively compare the properties of the financial instrument with the customer information. If a written declaration of suitability is missing or if it was not made available correctly, completely, not in the prescribed manner or not in time, credit institutions are acting improperly ( section 120 (8) no. 41 WpHG). The suitability declaration can serve the investor as evidence in civil law disputes if it emerges from it that the recommended financial instrument was not suitable for the client.
Individual evidence
- ↑ Hans Nickel, Investment Advice am Finanzplatz Deutschland , 2018, p. 131
- ↑ BT-Drs. 18/10936 of January 23, 2017, draft of a second law for the amendment of financial market regulations based on European legal acts , p. 236
- ↑ BaFin of September 18, 2018, Declaration of suitability : Important document for consumers , accessed on May 1, 2019
- ↑ BT-Drs. 18/10936 of January 23, 2017, draft of a second law to amend financial market regulations on the basis of European legal acts , p. 235
- ↑ BT-Drs. 18/10936 of January 23, 2017, draft of a second law to amend financial market regulations on the basis of European legal acts , p. 235
- ↑ BGH, judgment of July 6, 1993, Az .: XI ZR 12/93 = BGHZ 123, 126 ; "Bond judgment"
- ↑ Dörte Poelzig, Capital Market Law , 2018, p. 408
