The German Investment Schemes Act (VermAnlG) is an important set of rules in German law that regulates the market for investment schemes. In this comprehensive article, we will look at the VermAnlG, explain its structure and key provisions, and show how it is applied in practice.

Introduction to the VermAnlG

The Asset Investment Act came into force in 2012 and aims to strengthen investor protection and create transparency in the area of asset investments. In particular, it regulates the public solicitation of investments that are not equivalent to securities and establishes requirements for the distribution and advertising of these investments.

Structure of the VermAnlG

The VermAnlG consists of several parts:

1. General provisions: This part contains basic regulations on the application of the law and definitions.
2. Requirements for the public offering: The requirements for the public offering of assets are regulated here, including the obligation to publish a prospectus.
3. Distribution and advertising: This section contains regulations on the requirements for the distribution and advertising of investments.
4. Supervision and sanctions: This regulates the supervision of compliance with the law and possible sanctions for violations.
5. Transitional and final provisions: This section contains provisions for the transition from older regulations to the VermAnlG.

Important provisions of the VermAnlG

Prospectus requirement

One of the central provisions of the VermAnlG is the prospectus requirement. As a rule, anyone offering an investment to the public must publish a sales prospectus containing all material information about the investment.

Advertising and distribution

The VermAnlG contains strict regulations for the advertising and distribution of investments. For example, advertising materials must contain certain information and must not be misleading.

Supervision and sanctions

Compliance with the VermAnlG is monitored by the German Federal Financial Supervisory Authority (BaFin). Violations of the law may result in both fines and criminal penalties.

Application of the VermAnlG in practice

In practice, the VermAnlG is of central importance for providers of asset investments. They must ensure that their offerings, promotional materials, and sales practices comply with the law. Investors should also familiarize themselves with the VermAnlG in order to understand what rights and protections they are entitled to.

Example of the application of the VermAnlG

Let’s assume a company wants to raise capital for a new project via a crowdfunding platform. The company must prepare a prospectus containing all relevant information about the project and the facility. This prospectus must comply with the requirements of the VermAnlG and be approved by BaFin. In addition, the company must ensure that its advertising materials and sales practices comply with the provisions of the VermAnlG.

Criticism and discussion

The VermAnlG is not without controversy. Critics complain, among other things, that the regulations are too complex and difficult for small providers to implement. There are also discussions about the extent to which the VermAnlG should be reformed to bring it into line with current developments.

Conclusion

The German Investment Act (Vermögensanlagengesetz) is a complex set of regulations that is of central importance for the investment market in Germany. It aims to strengthen investor protection and create transparency. Both providers of investments and investors should familiarize themselves with the main features of the VermAnlG. If there are any uncertainties or special questions, it is advisable to seek expert advice.