Apply for permission as a fee-based financial investment advisor
You need a trade permit for your work as a fee-based financial investment advisor if you
- advise on transactions in certain financial instruments and your recommendation is based on an examination of the investor's personal circumstances (Section 1 (1a) No. 1a of the German Banking Act),
- advise on financial investments within the meaning of § 34f paragraph 1 numbers 1, 2 or 3 of the Industrial Code on a commercial basis and
- this advice is not remunerated on the commission basis of a provider of financial investments, but only against a fee from your client.
The installations referred to in § 34f paragraph 1 numbers 1, 2 or 3 of the Industrial Code are
- units or shares in domestic open-ended investment funds, open-ended EU investment funds or foreign open-ended investment funds that may be marketed under the German Investment Code (open-ended funds),
- units or shares in domestic closed-end investment funds, closed-end EU investment funds or foreign closed-end investment funds that may be distributed under the German Investment Code (closed-end funds) and
- Investments within the meaning of Section 1 (2) of the Asset Investment Act (e.g. shareholdings, profit participation rights, participatory loans, subordinated loans).
The fee-based financial investment advisor may also broker these products to the customer, but must then forward a benefit (commission) that he receives from the product provider to the customer.
Process flow
1. Application for permission
You must apply for permission to work as a fee-based financial investment advisor at the competent authority. Depending on the federal state, this is the trade authority or the Chamber of Industry and Commerce.
Individuals (natural persons) apply for permission themselves or through authorized third parties. In the case of legal entities, the application is made by their legal representatives or by third parties authorized in writing.
2. Notice of permission
Permission will be granted to you in the form of a permit notice.
3. Entry of the permit
After commencing work as a fee-based financial investment intermediary, you must immediately submit an application for entry in the register in accordance with Section 11a (1) of the Industrial Code
Requirements
Permission to engage in commercial activity as a fee-based financial investment advisor is granted to you if you
- are reliable,
- live in orderly financial circumstances,
- be able to prove professional indemnity insurance and
- have successfully passed a proficiency test at a Chamber of Industry and Commerce or can prove this required expertise by means of an equivalent professional qualification.
Which documents are required?
In order to be granted permission to act as a fee-based financial investment advisor, you must submit the following documents:
- a certificate of good conduct for submission to an authority
- an excerpt from the Central Trade Register,
- if applicable, a certificate in tax matters from the tax office,
- if applicable, a clearance certificate from the municipal tax office,
- an extract from the list of debtors of the central enforcement court,
- if applicable, the information of the insolvency court on the freedom from insolvency and on the rejection of the opening of proceedings due to lack of assets,
- proof of professional indemnity insurance,
- proof of the required expertise, and
- in the case of legal entities and commercial partnerships: the extract from the commercial register
What else should I know?
1. Scope of permission
You can apply for permission to act as a fee-based financial investment advisor for all product categories (open-ended funds, closed-end funds, investments within the meaning of Section 1 (2) of the Asset Investment Act), but it can also be limited to individual categories.
2. No double licence for financial investment intermediaries and fee-based financial investment advisors
The permission to work as a financial investment broker in accordance with § 34f of the Industrial Code and as a fee-based financial investment advisor in accordance with § 34h of the Industrial Code are mutually exclusive. Anyone who already has a licence as a financial investment intermediary can only obtain a licence as a fee-based financial investment advisor if he waives the licence as a financial investment intermediary.
Technically approved by
BMWi, VIIB3
Author
List-ID 848 (Whitelist; Status: 06.02.2020)
The text was automatically translated based on the German content.
