Investment services company

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Security service providers (Abbreviations: WpDU or WPDLU ) are according to § 2 Abs. 10 WpHG banks , financial services institutions and after § 53 Abs. 1, sentence 1 KWG operating companies which provide investment services alone or together with ancillary services commercially or on a circumference, one in commercial Requires wise business operations.

General

The term investment services enterprise is not to be confused with that of the securities trading enterprise defined in section 1 (3d) sentence 4 KWG . Securities trading companies are institutions that are not deposit- taking banks , but are nevertheless subject to supervision by the Federal Financial Supervisory Authority (BaFin). The term `` securities trading company '' used in the KWG is used to - to put it simply - to differentiate, from a regulatory point of view , companies that only trade in securities from companies that conduct extensive banking business, i.e. in particular accept deposits (e.g. savings or time deposits ) .

Companies according to Section 2 (1) No. 1 to 3 and Section 6 No. 1 to 3 KWG are not securities service companies (Section 2 (10) WpHG).

Legal issues

Investment service companies within the meaning of the Securities Trading Act (WpHG), on the other hand, are - regardless of their regulatory classification - all institutions that are authorized to provide investment services, including deposit-taking credit institutions. The obligations for investment services companies resulting from the WpHG and other legal provisions apply equally to securities trading companies and deposit-taking credit institutions as defined in the KWG.

Investment services within the meaning of this law are, according to Section 2 (8) WpHG u. a.

  1. the acquisition and sale of financial instruments in one's own name for third-party account,
  2. the acquisition and sale of financial instruments by way of proprietary trading for others,
  3. the acquisition and sale of financial instruments in the name of others for the account of others,
  4. brokering or providing evidence of transactions for the acquisition and sale of financial instruments,
  5. assuming financial instruments for placement at one's own risk or assuming equivalent guarantees ,
  6. the administration of individual assets invested in financial instruments for others with freedom of choice.

Securities ancillary services within the meaning of this law are according to § 2 para. 9 WpHG u. a.

  1. the safekeeping and administration of securities for others, unless the Depot Act is applicable,
  2. the granting of credits or loans to others for the performance of investment services by the company that granted the credit or loan,
  3. the advice when investing in financial instruments .

The main obligations of an investment services company offering financial instruments towards its customers are regulated in the ordinance specifying the rules of conduct and organizational requirements for investment services companies (WpDVerOV) (see also Financial Market Directive Implementation Act ). According to Section 2 (1) WpDVerOV, investment services companies must take the necessary organizational precautions, in particular set up principles, set up procedures and take measures to classify customers according to Section 67 WpHG ( risk class ) and to be able to review the classification of professional customers for justified reasons. The treatment of grants is in § 6 f. WpDVerOV regulated.

tasks

According to Section 63 (1) WpHG, investment services companies are obliged to provide investment services and ancillary investment services honestly , honestly and professionally in the best possible interests of their customers. An investment services company must understand the financial instruments it offers or recommends (Section 63 (2) WpHG); all customer information must be honest and clear and must not mislead (Section 63 (6) WpHG). If they provide investment advice , they must provide the private investor with a declaration of suitability on the suitability of the recommendation on a permanent data carrier prior to the conclusion of the contract , in accordance with Section 64 (4) WpHG . 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.

Pursuant to section 80 of the WpHG, investment services companies must comply with the organizational obligations under section 25a (1) of the KWG and section 25e of the KWG. Section 87 (1) of the WpHG requires investment services companies to employ only knowledgeable and reliable staff for investment advice ; this also applies to sales and financial portfolio management . In § 89 WpHG which is the legal basis for the audit set of investment services companies whose implementing provisions in the Regulation on the verification of investment services companies are included (WpDPV). Pursuant to Section 6 WpDPV, the auditing of investment services companies by auditors includes compliance with the requirements set out in Section 89 Paragraph 1 Clause 1 and 2 WpHG in all sub-areas of investment services and ancillary services.

International

In Austria , investment services companies are regulated in Section 4 WAG .

See also

literature