Germany’s Federal Financial Supervisory Authority has imposed two administrative fines amounting to €560,000 on flatexDEGIRO Bank AG.

The company had contravened obligations under the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG). At the beginning of 2022, flatexDEGIRO Bank AG advertised free investment services on two of its websites without clearly indicating that a processing fee would be charged on a regular basis.

flatexDEGIRO Bank AG adapted its practices to comply with the legal requirements in 2022.

Under the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG), investment services enterprises are obliged to present the benefits and risks of services, for example brokerage services or financial products such as shares or shares in ETFs, in an appropriate and balanced manner in the information they provide and in their marketing communications.

In doing so, companies are supposed to always clearly and unambiguously point out relevant risks, including disadvantages and weaknesses, when stating possible advantages of a service or financial instrument. These requirements are specified in more detail in the relevant EU regulation.

flatexDEGIRO Bank AG violated these provisions at the beginning of 2022 by advertising free investment services on two of its websites without clearly and explicitly pointing out that a processing fee would be charged on a regular basis.

BaFin may impose administrative fines on companies that breach these requirements. The maximum amount for this fine is €5 million or up to 10% of total revenue.

flatexDEGIRO Bank AG has already taken action with regard to the violations and in 2022 adapted its practices to comply with the legal requirements.