Information for securities trading companies

Assignment of securities trading companies to the EdW

Since 1998, all securities trading companies have been required by law to secure their liabilities from securities transactions through membership of a compensation scheme.

A separate "Application for admission to EdW", however, does not need to be submitted. In accordance with section 32 paragraph 3 of the KWG (German Banking Act), BaFin (German Federal Financial Supervisory Authority) notifies EdW when a company submits an application for a license pursuant to section 32 para 1 sentence 1 of the KWG, thereby providing EdW with the opportunity to state its opinion with regard to the application. In addition, BaFin allows EdW to view the applications and determine the extent of the risk of occurrence of a possible compensation case if authorization is granted or extended.

After BaFin has granted a securities trading company authorization to conduct banking or financial services, EdW is informed of the fact by BaFin. On the day authorization is granted, the securities trading company is assigned to EdW. The institutions then receive comprehensive information on statutory investor compensation and related obligations.

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