DE - Draft law to strengthen investor protection in Germany

03/05/2021

On 10 February 2021, the Bundesfinanzministerium adopted a draft law to further strengthen investor protection. In particular, the draft law includes the following rules:

  • So-called blind pool investments (i.e. investments where the specific investment objects have not yet been determined at the time the prospectus is prepared) are being prohibited to ensure that investors can make an informed assessment at the time the investment is made;

  • Investments may only be distributed by supervised investment advisors and financial investment intermediaries;

  • The possibilities for auditing the financial statements of issuers of investments are being improved and a control of use of funds by independent third parties introduced in order to prevent misuses;

  • In case of investor protection concerns by the German Federal Financial Supervisory Authority (BaFin), the review of investment prospectuses will be suspended in order to allow for consideration of possible product intervention measures;

  • And in order to further increase transparency for investors, investment sales prospectuses, securities information sheets and investment information sheets will be published on BaFin's website.

Head of Knowledge Management Strategy and Market Infrastructure - SGSS
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