Financial Location Promotion Act Introduces Extensive Changes for Financial Market Participants

The Financial Location Promotion Act (StoFöG) introduces numerous adjustments to the regulatory and tax framework for financial market participants.

In particular, investment firms, securities institutions, exchange operators and credit institutions will need to adapt their compliance structures to new conduct rules for research, expanded supervisory powers of BaFin, and a revised definition of systematic internalisation.

Investment funds, capital management companies and REIT companies are also affected. Among other changes, the minimum share of real estate income for REITs will be reduced from 75% to 65%, and investments in renewable energy infrastructure project companies will be permitted.

In addition, issuers must take into account new prospectus formats such as the EU follow-on prospectus and the EU growth issuance prospectus, and comply with expanded transparency obligations for multiple-voting shares. Many companies will also need to adapt their IT systems for reporting to the central European access portal (ESAP).