Germany Money and Banking: Banking Laws
German Banking Act
(Kreditwesengesetz - KWG)
Date Enacted: 1994
Individuals and Organizations Regulated: All banks and financial institutions operating in Germany, including credit institutions, financial services institutions, and investment firms.
Activities Regulated: Deposit-taking, lending, financial intermediation, and asset management.
Purpose of the Law: To ensure the stability and integrity of the German financial system, protect customers, and prevent money laundering and other illegal activities.
German Securities Trading Act
(Wertpapierhandelsgesetz - WpHG)
Date Enacted: 1994
Individuals and Organizations Regulated: All market participants, including stockbrokers, investment firms, and financial intermediaries.
Activities Regulated: The issuance, trading, and settlement of securities, insider trading, and market manipulation.
Purpose of the Law: To ensure the integrity and transparency of the securities markets in Germany, protect investors, and promote fair competition.
German Payment Services Supervision Act
(Zahlungsdiensteaufsichtsgesetz - ZAG)
Date Enacted: 2009
Individuals and Organizations Regulated: All payment service providers operating in Germany, including banks, electronic money institutions, and payment institutions.
Activities Regulated: Payment initiation, account information, and money remittance.
Purpose of the Law: To ensure the safety and efficiency of payment services, protect consumers, and prevent money laundering and terrorist financing.
German Anti-Money Laundering Act
(Geldwäschegesetz - GwG)
Date Enacted: 1993 (amended multiple times)
Individuals and Organizations Regulated: All financial institutions operating in Germany, including banks, insurance companies, and investment firms.
Activities Regulated: Customer due diligence, reporting of suspicious transactions, and record-keeping requirements.
Purpose of the Law: To prevent the use of the financial system for illegal activities and to protect the integrity of the German financial system.
German Investment Act
(Investmentgesetz - InvG)
Date Enacted: 2004
Individuals and Organizations Regulated: All investment funds operating in Germany, including mutual funds, exchange-traded funds (ETFs), and alternative investment funds (AIFs).
Activities Regulated: Fund management, investment restrictions, and disclosure requirements.
Purpose of the Law: To protect investors, ensure the transparency and efficiency of the investment fund industry, and promote fair competition.
German Insurance Supervision Act
(Versicherungsaufsichtsgesetz - VAG)
Date Enacted: 2016
Individuals and Organizations Regulated: Insurance companies operating in Germany, including life insurers, health insurers, and property and casualty insurers.
Activities Regulated: Insurance product design, sales and marketing, solvency requirements, and reporting requirements.
Purpose of the Law: To ensure the safety and stability of the German insurance industry, protect policyholders, and promote fair competition.
German Consumer Credit Act
(Verbraucherkreditgesetz - VKG)
Date Enacted: 1990 (amended multiple times)
Individuals and Organizations Regulated: Lenders offering consumer credit in Germany, including banks and other financial institutions.
Activities Regulated: Disclosure requirements, consumer credit agreements, and consumer protection measures.
Purpose of the Law: To protect consumers who take out credit, ensure the transparency and fairness of lending practices, and prevent abusive lending practices.
German Foreign Trade and Payments Act
(Außenwirtschaftsgesetz - AWG)
Date Enacted: 2020
Individuals and Organizations Regulated: All German companies engaged in foreign trade and payments.
Activities Regulated: Export controls, investment screening, and foreign exchange transactions.
Purpose of the Law: To regulate foreign trade and payments to protect national security and foreign policy interests, ensure economic stability, and prevent money laundering and terrorism financing.
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