Violation of the authorisation requirement under section 32 (1) of the German Banking Act (Kreditwesengesetz – KWG)
Jonar N. Stein/www.jonarnstein.com: BaFin prohibits unauthorised provision of investment advice and portfolio management and the unauthorised conduct of safe custody business
In a notice dated 15 September 2020, BaFin ordered the company Jonar N. Stein, Hong Kong, to immediately cease providing unauthorised investment advice and portfolio management services and conducting unauthorised safe custody business.
Jonar N. Stein initiates contact with potentially interested parties. Once a party has opened an account with the company, the company then trades in financial instruments on the client’s behalf. Furthermore, Jonar N. Stein gives its clients investment recommendations regarding certain financial instruments and then buys and sells such instruments, using the respective trading account. Where it purchases securities for investors, Jonar N. Stein holds the securities in safekeeping and administers them.
The company thus provides investment advice as defined in section 1 (1a) sentence 2 no. 1a of the KWG and portfolio management services as defined in section 1 (1a) sentence 2 no. 3 of the KWG on a commercial basis. Moreover, the company conducts safe custody business as defined in section 1 (1) sentence 2 no. 5 of the KWG on a commercial basis. Jonar N. Stein does not hold authorisation from BaFin as required under section 32 (1) of the KWG and is therefore conducting unauthorised business.
