Investment broking

Section 1 para. 1a sentence 2 no. 1 of the German Banking Act (KWG) defines investment broking as “the brokering of business involving the purchase and sale of financial instruments”. In principle, it is irrelevant whether the brokerage is for the investment provider or the investor.

In contrast to investment advice, investment brokerage presents a concrete transaction to the investor concerning the acquisition or sale of a financial instrument. Therefore, in the case of investment broking there is no personal consultation but the main focus is on the advertising character.

Investment broking requires a licence pursuant to Section 32 para. 1 KWG. There is a possibility to rely on the exemption provided in S. 2 para. 6 sentence 1 no. 8 KWG. If a company’s business activities fulfil the conditions for the block exemption, the company does not require a licence from BaFin pursuant to Section 32 para. 1 KWG. A general business licence pursuant to Section 34f para. 1 of the German Trade, Commerce and Industry Regulation Act (GewO) is then normally sufficient.