Definitions

(1) A securities institution is an undertaking that provides investment services, whether alone or together with ancillary investment services or ancillary business, on a commercial basis or on a scale that requires a commercially organised business undertaking.
(2) Investment services within the meaning of this Act are: 1. the purchase or sale of financial instruments in one's own name for the account of another (principal broking business); 2. the underwriting of financial instruments for one's own risk for the purpose of placement, or the assumption of equivalent guarantees (underwriting business); 3. the arranging of transactions for the purchase and sale of financial instruments (investment broking); 4. the giving of personal recommendations within the meaning of Article 9 of Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive (OJ L 87, 31.3.2017, p. 1; L 246, 26.9.2017, p. 12; L 82, 26.3.2018, p. 18), as last amended by Commission Delegated Regulation (EU) 2019/1011 (OJ L 165, 21.6.2019, p. 1), to customers or their representatives, relating to transactions in particular financial instruments, provided the recommendation is based on a consideration of the investor's personal circumstances or is presented as suitable for the investor and is not issued exclusively through distribution channels or to the public (investment advice); 5. the purchase or sale of financial instruments in another's name for the account of another (contract broking); 6. the operation of a multilateral system which brings together multiple third-party buying and selling interests in financial instruments — in the system and in accordance with non-discretionary rules — in a way that results in a contract for the purchase of such financial instruments (operation of a multilateral trading facility); 7. the operation of a multilateral system, other than a regulated market or a multilateral trading facility, that brings together multiple third-party buying and selling interests in bonds, structured finance products, emission allowances or derivatives, in the system and in a way that results in a contract for the purchase of such financial instruments (operation of an organised trading facility); 8. the placement of financial instruments without a firm underwriting commitment (placement business); 9. the management of individual or several portfolios invested in financial instruments for others, with discretion (financial portfolio management); 10. dealing on own account through a) the continuous offering to buy and sell financial instruments on the financial markets at prices set by oneself, for one's own account and using one's own capital (market making); b) the frequent, organised and systematic conduct of dealing in shares, share certificates, exchange-traded funds, certificates and other comparable financial instruments for one's own account outside a regulated market or a multilateral or organised trading facility, where customer orders are executed outside a regulated market or a multilateral or organised trading facility without a multilateral trading facility being operated (systematic internalisation); c) the purchase or sale of financial instruments for one's own account as a service to others; or d) the buying or selling of financial instruments for one's own account as a direct or indirect participant in a domestic regulated market or a multilateral or organised trading facility, by means of a high-frequency algorithmic trading technique characterised by aa) an infrastructure intended to minimise network latencies and other delays in order transmission (latencies), featuring at least one of the following facilities for the input of algorithmic orders: aaa) co-location, bbb) proximity hosting, or ccc) high-speed direct electronic market access, bb) system-determined order initiation, generation, routing or execution without human intervention within the meaning of Article 18 of Delegated Regulation (EU) 2017/565, and cc) high message intraday rates within the meaning of Article 19 of Delegated Regulation (EU) 2017/565, in the form of orders, quotes or cancellations, whether or not this constitutes a service to others (high-frequency trading). The conditions for systematic internalisation under the first sentence, no. 10, letter b) are also satisfied where an undertaking has voluntarily submitted itself to the rules applicable to systematic internalisation and has applied to the Bundesanstalt for authorisation to conduct systematic internalisation. This also applies to systematic internalisation in respect of bonds, structured finance products and emission allowances, and of the derivatives referred to in Article 8a(2), first sentence of Regulation (EU) No 600/2014.
(3) Ancillary investment services within the meaning of this Act are: 1. the safekeeping and administration of financial instruments for the account of others, other than units of account, including custodianship and related services such as cash/collateral management, but excluding the provision and maintenance of top-tier securities accounts (central maintenance) under Section A, point 2 of the Annex to Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012 (OJ L 257, 28.8.2014, p. 1; L 349, 21.12.2016, p. 5), as last amended by Regulation (EU) 2016/1033 (OJ L 175, 30.6.2016, p. 1); 2. the granting of loans or other credits to another for the carrying out of investment services, where the undertaking granting the credit or loan is involved in the transaction; 3. advice to undertakings on capital structure and industrial strategy, and advice and services relating to mergers and the acquisition of undertakings; 4. foreign exchange services, where these are connected with the provision of investment services; 5. the production or dissemination of investment recommendations or investment strategy recommendations within the meaning of Article 3(1), point 34 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ L 173, 12.6.2014, p. 1; L 287, 21.10.2016, p. 320; L 306, 15.11.2016, p. 43; L 348, 21.12.2016, p. 83), as last amended by Regulation (EU) 2019/2115 (OJ L 320, 11.12.2019, p. 1) (investment strategy recommendation) or investment recommendations within the meaning of Article 3(1), point 35 of Regulation (EU) No 596/2014; 6. services connected with underwriting business; and 7. services relating to an underlying referred to in subsection (8), no. 2 or 5, connected with investment services or ancillary investment services.
(4) Ancillary business within the meaning of this Act is: 1. the safekeeping and administration of securities exclusively for alternative investment funds (AIFs) within the meaning of section 1(3) of the Capital Investment Code (restricted custody business); 2. the arranging of deposit business with undertakings having their seat outside the European Economic Area (third-country deposit arranging); 3. the safekeeping, administration and safeguarding of cryptographic instruments, or the safeguarding of private cryptographic keys for others, serving to store or dispose of cryptographic instruments, crypto securities within the meaning of section 4(3) of the Electronic Securities Act, or crypto fund units within the meaning of section 1, second sentence of the Regulation on Crypto Fund Units (qualified crypto custody business); and 4. the administration of a crypto securities register under section 16 of the Electronic Securities Act (crypto securities register administration). Cryptographic instruments within the meaning of this Act are digital representations of value that are not issued or guaranteed by a central bank or public authority, do not have the legal status of currency or money, but are accepted by natural or legal persons as a means of exchange or payment, by virtue of an agreement or actual practice, or serve investment purposes, and that can be transmitted, stored and traded electronically. The following are not cryptographic instruments within the meaning of this Act: 1. electronic money within the meaning of section 1(2), third sentence of the Payment Services Supervision Act; 2. monetary value that satisfies the requirements of section 2(1), no. 10 of the Payment Services Supervision Act, or that is used only for payment transactions within the meaning of section 2(1), no. 11 of the Payment Services Supervision Act; 3. crypto-assets within the meaning of Article 3(1), point 5 of Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937 (OJ L 150, 9.6.2023, p. 40), as amended by Regulation (EU) 2023/2869 (OJ L, 2023/2869, 20.12.2023), within the scope of application of Regulation (EU) 2023/1114; 4. securities within the meaning of the Custody Act.
(5) Financial instruments within the meaning of this Act are: 1. shares and other interests, comparable to shares, in domestic or foreign legal persons, partnerships and other undertakings, as well as depositary receipts representing shares or interests comparable to shares; 2. investment assets within the meaning of section 1(2) of the Capital Investment Act, other than shares in a cooperative society within the meaning of section 1 of the Cooperative Societies Act; 3. debt instruments, in particular participation certificates, bearer debt securities, order debt securities and rights comparable to such debt instruments, which by their nature are tradeable on the capital markets, other than payment instruments, as well as depositary receipts representing such debt instruments; 4. other rights entitling the holder to acquire or dispose of rights under nos. 1 and 3, or giving rise to a cash settlement determined by reference to such rights, to currencies, interest rates or other yields, or to commodities, indices or measures; 5. units in collective investment undertakings within the meaning of section 1(1) of the Capital Investment Code; 6. money-market instruments; 7. foreign exchange or units of account; 8. derivatives; 9. allowances under section 3, no. 3 of the Greenhouse Gas Emissions Trading Act, emission reduction units under section 2, no. 20 of the Project Mechanisms Act, and certified emission reductions under section 2, no. 21 of the Project Mechanisms Act, insofar as these may respectively be held in the emissions trading register (emission allowances); 10. (repealed); 11. instruments admitted for crowdfunding purposes under Article 2(1), letter n) of Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European crowdfunding service providers for business, and amending Regulation (EU) 2017/1129 and Directive (EU) 2019/1937 (OJ L 347, 20.10.2020, p. 1), as amended from time to time (crowdfunding instruments).
(6) Depositary receipts within the meaning of this Act are securities that are tradeable on the capital market, that certify a right of ownership in securities of issuers having their seat abroad, that are admitted to trading on a regulated market, and that can be traded independently of the securities of the issuer concerned having its seat abroad.
(7) Money-market instruments within the meaning of this Act are instruments within the meaning of Article 11 of Delegated Regulation (EU) 2017/565, other than payment instruments.
(8) Derivatives within the meaning of this Act are: 1. forward transactions, structured as purchase, exchange or otherwise, or option transactions, that fall to be performed with a delay and whose value is derived, directly or indirectly, from the price or measure of an underlying (forward transactions) referencing the following underlyings: a) securities or money-market instruments; b) foreign exchange, insofar as the transaction does not satisfy the conditions of Article 10 of Delegated Regulation (EU) 2017/565, units of account, or crypto-assets within the meaning of Article 3(1), point 5 of Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937 (OJ L 150, 9.6.2023, p. 40), excluding crypto-assets under Article 4(3), letter c) of Regulation (EU) 2023/1114; c) interest rates or other yields; d) indices of the underlyings in letters a, b, c, f and other financial indices or financial measures; e) derivatives; or f) emission allowances; 2. forward transactions referencing commodities, freight rates, climatic or other physical variables, inflation rates or other economic variables, or other assets, indices or measures as underlyings, provided that they a) fall to be settled in cash, or give one party the right to require cash settlement, without that right arising by reason of default or other termination event; b) are concluded on a regulated market or in a multilateral or organised trading facility, unless they are wholesale energy products traded on an organised trading facility that must be physically settled; or c) have the characteristics of other derivative contracts within the meaning of Article 7 of Delegated Regulation (EU) 2017/565, serve non-commercial purposes, and are not spot transactions within the meaning of Article 7 of Delegated Regulation (EU) 2017/565; 3. financial contracts for differences; 4. forward transactions, structured as purchase, exchange or otherwise, or option transactions, that fall to be performed with a delay and serve the transfer of credit risk (credit derivatives); 5. forward transactions referencing the underlyings named in Article 8 of Delegated Regulation (EU) 2017/565, provided they satisfy the conditions of no. 2.
(9) A provider of ancillary services within the meaning of this Act is an undertaking whose main activity consists in 1. owning or managing real property, 2. the management of data-processing services, or 3. an activity similar to nos. 1 and 2 which, in relation to the main activity of one or more securities institutions, has the character of an ancillary activity.
(10) Commodity and emission allowance dealers within the meaning of this Act are commodity and emission allowance dealers within the meaning of Article 4(1), point 150 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1; L 208, 2.8.2013, p. 68; L 321, 30.11.2013, p. 6; L 193, 21.7.2015, p. 166; L 20, 25.1.2017, p. 3; L 13, 17.1.2020, p. 58; L 335, 13.10.2020, p. 20), as last amended by Regulation (EU) 2020/873 (OJ L 204, 26.6.2020, p. 4).
(11) A branch within the meaning of this Act is a place of business that 1. is not the head office, 2. forms a legally dependent part of a securities institution, and 3. provides investment services, and where applicable ancillary investment services, for which the securities institution has been granted a licence. All places of business of a securities institution whose head office is in another state party, situated in the same state party, are deemed to constitute a single branch.
(12) A close link within the meaning of this Act exists where at least two natural or legal persons are connected with one another as follows: 1. by a participating interest consisting in the direct holding, or holding by way of control, of at least 20 per cent of the voting rights or of the capital of an undertaking; 2. by control in the form of a relationship between a parent undertaking and a subsidiary undertaking, in the cases referred to in Article 22(1) and (2) of Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19; L 369, 24.12.2014, p. 79), as last amended by Directive 2014/102/EU (OJ L 334, 21.11.2014, p. 86), or a comparable relationship between a natural or legal person and an undertaking; subsidiary undertakings of subsidiary undertakings are also deemed subsidiary undertakings of the parent undertaking that stands at the head of those undertakings; or 3. by a lasting controlling relationship of at least two natural or legal persons with the same third person.
(13) Competent authority within the meaning of this Act means, domestically, the Federal Financial Supervisory Authority (Bundesanstalt), and abroad, an authority or public body of a state party officially recognised under national law that is empowered under that law, within the supervisory system applicable in the state party concerned, to supervise securities institutions under Directive (EU) 2019/2034 of the European Parliament and of the Council of 27 November 2019 on the prudential supervision of investment firms and amending Directives 2002/87/EC, 2009/65/EC, 2011/61/EU, 2013/36/EU, 2014/59/EU and 2014/65/EU (OJ L 314, 5.12.2019, p. 64).
(14) Compliance with the group capital test within the meaning of this Act is compliance, by the parent undertaking of a securities institution group, with the requirements set out in Article 8 of Regulation (EU) 2019/2033 of the European Parliament and of the Council of 27 November 2019 on the prudential requirements of investment firms and amending Regulations (EU) No 1093/2010, (EU) No 575/2013, (EU) No 600/2014 and (EU) No 806/2014 (OJ L 314, 5.12.2019, p. 1; L 20, 24.1.2020, p. 26).
(15) Credit institution within the meaning of this Act is a credit institution within the meaning of Article 4(1), point 1 of Regulation (EU) No 575/2013.
(16) Small securities institution within the meaning of this Act is a securities institution that satisfies the conditions of Article 12(1) of Regulation (EU) 2019/2033.
(17) Medium-sized securities institution within the meaning of this Act is a securities institution that does not satisfy the conditions of Article 12(1) of Regulation (EU) 2019/2033.
(18) Large securities institution within the meaning of this Act is a securities institution within the meaning of subsection (1) that, by virtue of Article 1(2) of Regulation (EU) 2019/2033, or of a permission under Article 1(5) of Regulation (EU) 2019/2033, or under section 8, is required to apply Regulation (EU) 575/2013.
(19) The home state party of a securities institution is 1. where it is a natural person, the state party in which the head office of the securities institution is situated; 2. where it is a legal person, the state party in which the seat of the securities institution is situated; or 3. where it is a legal person for which no seat is determined under the national law applicable to the securities institution, the state party in which the head office of the securities institution is situated.
(20) The host state party of a securities institution is the state party in which the securities institution maintains a branch, or in which it provides investment services by way of the cross-border provision of services.
(21) Systemic risk within the meaning of this Act is the risk of a disruption of the financial system with the potential to have serious negative consequences for the financial system and the real economy.
(22) Control within the meaning of this Act is the relationship between a parent undertaking and a subsidiary undertaking as described in Article 22(1) and (2) of Directive 2013/34/EU, or in the accounting standards applicable to the securities institution from time to time under Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards (OJ L 243, 11.9.2002, p. 1), as last amended by Regulation (EC) No 297/2008 (OJ L 97, 9.4.2008, p. 62), or a similar relationship between a natural or legal person and an undertaking.
(23) Significant holding within the meaning of this Act is a qualifying holding within the meaning of Article 4(1), point 36 of Regulation (EU) No 575/2013. For the calculation of the proportion of voting rights, section 33(1) in conjunction with a statutory instrument under section 33(3), section 34(1) and (2), section 35(1) to (3) in conjunction with a statutory instrument under section 35(6), and section 36 of the Securities Trading Act apply correspondingly. Voting rights or capital interests that credit institutions or securities institutions hold in the course of underwriting business under subsection (2), no. 2 are disregarded, provided such rights are not exercised or otherwise used to intervene in the management of the issuer and are disposed of within one year after the time of acquisition.
(24) Group within the meaning of this Act is a group within the meaning of Article 2, point 11 of Directive 2013/34/EU.
(25) Securities institution group is a group of undertakings within the meaning of Article 4(1), point 25 of Regulation (EU) 2019/2033.
(26) Financial institution within the meaning of this Act is a financial institution within the meaning of Article 4(1), point 14 of Regulation (EU) 2019/2033.
(27) Investment holding company within the meaning of this Act is a financial institution whose subsidiary undertakings are exclusively or mainly securities institutions or financial institutions, at least one such subsidiary undertaking being a securities institution. A financial holding company within the meaning of Article 4(1), point 20 of Regulation (EU) No 575/2013 is not an investment holding company.
(28) Mixed financial holding company within the meaning of this Act is a mixed financial holding company within the meaning of Article 4(1), point 40 of Regulation (EU) 2019/2033.
(29) Mixed-activity holding company within the meaning of this Act is a parent undertaking that is not a financial holding company, an investment holding company, a credit institution, a securities institution or a mixed financial holding company within the meaning of this Act, and among whose subsidiary undertakings there is at least one securities institution.
(30) Parent undertaking within the meaning of this Act is a parent undertaking within the meaning of Article 2, point 9 and Article 22 of Directive 2013/34/EU.
(31) Subsidiary undertaking within the meaning of this Act is a subsidiary undertaking within the meaning of Article 2, point 10 and Article 22 of Directive 2013/34/EU, including all subsidiary undertakings of a subsidiary undertaking of the parent undertaking that stands at the head of the group.
(32) Sister undertaking within the meaning of this Act is a sister undertaking within the meaning of section 1(7) of the Banking Act.
(33) EU parent securities institution within the meaning of this Act is a securities institution within the meaning of Article 3(1), point 31 of Directive (EU) 2019/2034 in conjunction with Article 4(1), point 56 of Regulation (EU) 2019/2033.
(34) EU parent investment holding company within the meaning of this Act is a company within the meaning of Article 4(1), point 57 of Regulation (EU) 2019/2033.
(35) Mixed EU parent financial holding company within the meaning of this Act is a parent financial holding company within the meaning of Article 3(1), point 33 of Directive (EU) 2019/2034 in conjunction with Article 4(1), point 58 of Regulation (EU) 2019/2033.
(36) Managers within the meaning of this Act are those natural persons who, under statute, articles of association or partnership agreement, are called upon to conduct the business of, and represent, a securities institution or an undertaking constituted as a legal person or commercial partnership that is a securities institution within the meaning of subsection (1).
(37) State party within the meaning of this Act is a Member State of the European Union or a state party to the Agreement on the European Economic Area.
(38) Outsourcing undertakings within the meaning of this Act are undertakings to which a securities institution or a superordinate undertaking has outsourced activities and processes for the carrying out of investment services, ancillary investment services or ancillary business, and their sub-contractors in the case of further outsourcing of activities and processes material to the carrying out of investment services, ancillary investment services or ancillary business.
(39) Central counterparty within the meaning of this Act is a CCP within the meaning of Article 2, point 1 of Regulation (EU) No 648/2012.
(39) [sic — the German original numbers this paragraph (39) as well] Data reporting services providers within the meaning of this Act are data reporting services providers within the meaning of section 2(40) of the Securities Trading Act.