Investment Club
An investment club ( or investment club, Club shares, securities investors club or club) is an association of private investors with the aim of jointly investing. The common assets of the Club is in this case normally managed in a common, denominated in the club custodian, to which all the members are involved.
Classification of Investment Clubs
It is important to distinguish between:
- Regional clubs, which usually consist of a limited number of members, who normally also personally know or have met through the club.
- On regional clubs with hundreds of members, a separate investment committee and largely professional structures
How many regional clubs are in the German-speaking countries can not say exactly because there is no central entity, which takes you on a statistic. On the Internet you can find several dozen. It may well be that the number in Germany is located at 7,000 and more such regional clubs.
There are different reasons for starting or joining an investment club:
- Pooling of smaller investment amounts to spread risk
- To minimum investment amount, for example, to achieve in funds at all
- Fees for optimization, as most banks charge fees after declining order volumes
Many of the regional investment clubs are sometimes in addition to these primary objectives, but also the social gathering.
Demarcation to savings clubs
Savings clubs - as they often are in restaurants - differ from one investment club by the fact that in a savings club
- Mostly deposited in a savings cabinet amounts ( savings rates ) are smaller, for example, a few euros per week
- Are not created the funds collected but not more than on an ordinary savings account
- Be fully paid once per year
A savings club also consists mostly informal. It is usually neither a registered charity nor a company.
Demarcation to financial services
An investment club is - if you look at the mass of the smaller, regional clubs - not a financial services provider. Unlike, for example, for a fund, an investment club is not meant that one deposits money there and then its increase hopes by others. Rather, an investment club lives assuming that the individual members also actively participate in investment decisions.
Legal position in the German-speaking countries
Investment Clubs in Germany
In an investment club under German law, it is a investment community, which together create and manage capital. The legal form is in most cases a GbR ( civil-law ).
Up to a limit of 50 members and 500,000 euro paid in capital, an investment club is not subject to supervision, where no commercial activity takes place and no payment is made for the club leadership. Once one of these limits is exceeded, the Law for the protection of investors require authorization as a financial services provider by the BaFin ( Federal Financial Supervisory Authority ). This is however subject to very strict requirements that can be met by investment clubs is not readily naturally. In particular, the CEO must previously have served as an officer in the portfolio management to ensure that the Club receives approval. This requirement can only fulfill by using an external service provider for the portfolio management is integrated in practice. However, the cost of such service providers are then ( in part due to the low volume ) is higher than the management fees of commercial investment funds, so that the club loses its efficiency.
As the shares of the investment clubs offered to the public, also a prospectus after prospectus law must be created. This clears up on the structure, the risks and fees. For the prospectus requirement rules stricter than the permit requirement, so that it can continue to exist even if the club has fewer than 50 shareholders and 500,000 euro capital apply. A prospectus must not only be created if the offer is limited to a maximum of 20 club shares and is made from the beginning specifying that within twelve months more than 100,000 euros deposit to be re- collected. Must also be published when, for example, be made aware of a website on this exceptional event. Of the estimated around 5000 shares Clubs in Germany currently have about half a dozen a prospectus.
Basis of the investment club is the social contract that must be signed by all partners.
Federation of German investment clubs is the German Association for the Protection Wertpapierbesitz eV ( DSW).
It is difficult lately for investment clubs to find a custodian, on the one hand the effort for the admission of new shareholders for the bank is very high and on the other hand, the club competes for investment sales business of the Bank. The DSW and Sparkassen Broker have an extensive cooperation agreement, so that there safekeeping is adopted for all clubs.
The flat tax problem for Investment Clubs
The introduction of the flat tax has a major impact in particular for investment clubs, as speculative gains achieved without active counteracting the club management are often subjected to double taxation. This double taxation rests solely with the remaining shareholders, so that from an investment club tax overpayment must be recovered through the annual tax return.
Markets in Financial Instruments Directive, MiFID
Due to the MiFID (Markets in Financial Instruments Directive, German: Directive on Markets in Financial Instruments ) no change to arise for investment clubs on the criteria of the licensing requirement of the Board after 32 § the Banking ( Banking Act - KWG).
Investment Clubs in Switzerland
In an investment club under Swiss law is a team of organized investors who invest jointly invested capital by their own rules and manage. The legal form is a simple society.
Such investment clubs are not under the Collective Investment Schemes Act (formerly the Investment Fund Act ), short KAG if they adhere to the following four rules.
It is of the opinion that the club members know each other personally and not legal persons are included. Any capital gains are treated as tax-free for natural persons.
Reasons for the founding of investment clubs are common investment and savings bank fees, charges and brokerage fees, as can be traded with higher amounts of money.
The Club Regulations, the Investment Club agreement governs everything that is not already covered in the mandatory law. This must be signed by all members and filed with the relevant bank.