Broker Dealer Contract Template for Germany

The Broker Dealer Contract serves as the foundational document establishing the legal and operational framework for securities trading and financial services relationships in Germany. It is essential when a broker-dealer firm intends to provide regulated financial services to clients, whether institutional or professional, under German jurisdiction. The contract ensures compliance with the German Securities Trading Act (WpHG), Banking Act (KWG), and other applicable regulations while incorporating EU-wide requirements such as MiFID II. This document typically includes comprehensive provisions covering service scope, regulatory obligations, client classification, order execution policies, fee structures, and risk management procedures. It is designed to protect both parties' interests while maintaining regulatory compliance and operational efficiency in the German financial markets.

1. Parties: Identification of the broker-dealer and the client, including regulatory status and contact details

2. Background: Context of the agreement and regulatory framework under which services are provided

3. Definitions: Key terms used throughout the agreement, including regulatory and technical terminology

4. Scope of Services: Detailed description of broker-dealer services to be provided, including any limitations

5. Regulatory Compliance: Obligations regarding compliance with WpHG, KWG, and other applicable regulations

6. Client Classification: Classification of the client under MiFID II/WpHG and associated protections

7. Orders and Execution: Process for placing and executing orders, best execution obligations

8. Fees and Charges: Compensation structure, fees, commissions, and payment terms

9. Client Assets: Handling of client funds and securities, segregation requirements

10. Reporting and Communications: Requirements for transaction reporting, account statements, and other communications

11. Risk Disclosures: Mandatory risk warnings and disclosures

12. Representations and Warranties: Standard and regulatory-specific representations by both parties

13. Confidentiality and Data Protection: Obligations regarding confidential information and GDPR compliance

14. Term and Termination: Duration of agreement and termination provisions

15. Liability and Indemnification: Extent of liability and indemnification obligations

16. Governing Law and Jurisdiction: German law as governing law and jurisdiction provisions