On 10 July, the Retail Investor Protection Act (Kleinanlegerschutzgesetz), which had been passed in Germany's parliament, the Bundestag, came into force after some last-minute amendments to the parts that dealt with crowdfunding and advertisements.

The Act has introduced new obligations for providers of capital investments. For example, it defines their obligation to draw up prospecti in much more detail than before and has widened its application. From now on also, providers must include more information about personal interrelationships and provide the market with specific information even after offers to the public have been closed. The Act has also introduced a minimum term of 24 months for capital investments and has made the accounting rules more onerous.

An increase in the BaFin's powers

The Act has awarded new powers to the Bundesanstalt für Finanzdienstleistungsaufsicht or BaFIN, Germany's all-in-one financial regulator. Now it can, for example, restrict or even prohibit the sale of certain products, review the balance sheets of companies of the unregulated capital market and publish on its website any steps it takes against market participants in order to warn investors.

Crowdfunding

According to the latest sources, there are two classes of investor in crowdfunding. The lower group, without large incomes, are allowed to put €1,000 apiece into each business venture, while the better-off are allowed to invest €10,000 if their liquid assets come to €100,000 or more.