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Private Investors


Private Investors


Private Investors or private customers (also called small investors or retail investors) are customers who are not professional customers (Section 67 (3) WpHG). This includes all natural persons who do not have sufficient experience, knowledge and expertise (general financial education) to make their investment decisions themselves and to be able to adequately assess the associated risks. They always require investment advice. This is intended to reduce or completely eliminate asymmetrical information for private investors.

According to the “suitability rule”, credit institutions are required to only recommend a financial product to private customers if it is suitable for them. A financial instrument is suitable for private customers if it corresponds to the customer's investment goals, the resulting risks can be borne by the customer and the customer knows how to correctly assess the risks.


Knowledge and experience are to be determined and classified. According to Section 64 (4) WpHG and Sections 3 and 9 WpDVerOV, investment advice for a private customer must be confirmed by a written declaration of suitability before the securities order is concluded. According to section 82 (4) and (6) sentence 2 WpHG, credit institutions must inform their private customers that in the event of a customer instruction they will execute the order in accordance with the customer instruction and are therefore not obliged to carry out the order in accordance with their principles of order execution to the best possible result.


According to the clarification of the BaFin of June 25, 2010 [6], municipalities, districts and urban districts are considered private customers within the meaning of Section 67 (3) WpHG because they are not “regional governments” within the meaning of Section 67 (2) sentence 2 no 3 WpHG.




Private investors or "private equity" (OTC equity or private equity capital) is a form of equity capital in which the investment entered into by the investor is not tradable on regulated markets (stock exchanges). The financiers can be private or institutional investors; Often it is equity investment companies that specialize in this form of investment, which is why they are also called private equity companies (PEG).


If the capital is made available to young, innovative companies that naturally harbor a high risk, but also corresponding growth opportunities, one speaks of venture capital. The corresponding institutional investors are called venture finance companies or venture capital companies (VCG).


Source: Investors

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