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May 19, 2026

Streamlining Prospectus Regulations – What Changes Will the EU Listing Act Bring in June 2026?

With the EU Listing Act, the European Union aims to make access to the capital market easier and more cost-effective. In particular, small and medium-sized enterprises (SMEs) should be able to raise capital more easily in the future without being hindered by excessive prospectus requirements. This initiative comes in response to growing criticism that European capital markets have become too bureaucratic and expensive compared to their international counterparts—particularly the United States. In this regard, the reform of the EU Prospectus Regulation specifically targets information and disclosure requirements. While initial changes will apply as soon as the Listing Act enters into force at the end of 2024, the key changes will largely take effect starting in March or June 2026. Of particular relevance is the expansion of existing exemptions from the prospectus requirement. Public offerings with a total consideration of up to 12 million euros within a twelve-month period in the Union will be exempt from the prospectus requirement starting June 5, 2026. Previously, the threshold was 8 million euros. For many growth companies, this means significantly simplified access to the capital market. Issuances by companies whose securities are already admitted to trading on a regulated market will also benefit from the new rules. The EU is thus responding to criticism that secondary issuances have so far entailed high costs and significant time commitments. The aim of the reform was therefore not only to make capital market transactions more efficient, but also to make the European capital market as a whole more attractive and competitive.

The EU Growth Issuance Prospectus and the EU Follow-on Prospectus as New Formats for Securities Prospectuses

A key component of the EU Listing Act is the new prospectus formats, which will take effect as early as March 5, 2026. These formats now distinguish between different types of issuers. For companies with securities already admitted to trading on a regulated market, the so-called EU follow-on prospectus is being introduced. The newly introduced EU growth issuance prospectus is intended to be available to small and medium-sized enterprises as well as issuers on SME growth markets and to facilitate fundraising. Both formats are designed to be concise, standardized, and easy to understand. The European regulator’s goal is to reduce preparation costs and improve readability for investors. In addition, mandatory requirements regarding the structure, order, and maximum length of certain prospectuses will be introduced as of June 5, 2026. This is intended to reduce the typical “information overload” that has made many prospectuses virtually unreadable to date. In addition, digital processes will be facilitated or introduced. For example, issuers, offerors, and financial intermediaries will be permitted in certain cases to inform investors exclusively electronically about prospectus supplements. New financial information can also be more easily integrated into existing prospectuses by reference. The shortened deadline for initial public offerings of shares on a regulated market is also likely to be particularly relevant in practice. In the future, prospectuses will only need to be published three working days before the end of the offer period, instead of the previous six. For issuers, this means greater flexibility and faster placements, and thus simpler and faster capital raising.

ESG Requirements Could Reduce the Simplification Effect

Despite all these simplifications, however, it remains unclear whether the Listing Act will actually advance the hoped-for “Capital Markets Union.” In particular, the new sustainability disclosures that are also planned could partially offset the simplification intended by the EU Listing Act. Specifically, disclosure requirements regarding ESG will be introduced as of June 5, 2026. These relate to sustainability reporting and compliance with certain sustainability targets. Furthermore, prospectus liability risks will remain significant. The increasing standardization of prospectuses also carries risks. While it improves comparability, it could simultaneously lead to such a standardized form of disclosure that the specific characteristics of individual issuers and their offerings may no longer be adequately taken into account. Nevertheless, the reforms and simplifications represent a step toward easier capital raising in Europe. Especially since the European regulator’s focus in recent years has been almost exclusively on increased compliance obligations, the simplifications mentioned above send a positive signal to the European capital market. It is therefore worthwhile for issuers, offerors, and financial intermediaries to carefully analyze the new prospectus formats and exemptions and to adapt their capital market strategy to the new legal framework now.

Attorney Dr. Lutz Auffenberg, LL.M. (London)

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    May 12, 2026

    Social Trading and Signal Following – What Regulatory Considerations Do Providers Need to Keep in Mind?

    Over the past few years, numerous platforms have emerged on the market that offer so-called day traders the opportunity to invest directly in various financial instruments without the involvement of a broker. The available product portfolio includes not only traditional spot trades in stocks, debt securities, or cryptocurrencies, but also investments in futures, options, and derivative financial instruments. For day traders who do not have enough time to manage their portfolio themselves, so-called social trading or signal following may be of interest. This allows platform users to follow the trading activities of other platform users and implement their trading decisions at the same time. There are various forms of social trading and signal following, in which customers either have published trading algorithms or trading bots to automatically execute the suggested trading decisions in their account, or simply observe the trading activities of another trader to then decide on a case-by-case basis whether and to what extent a trade should also be executed. Social trading and signal following entail a number of regulatory pitfalls that both clients and providers should be aware of. The regulatory obligations of platform operators, signal providers, and clients differ fundamentally.

    Which Stakeholders Require a BaFin License for Their Role in Social Trading?

    Operators of platforms that enable social trading or signal following generally require regulatory approval to conduct their business. If the trading signals made available relate to financial instruments in the traditional sense, such as stocks, bonds, certificates, futures, or derivatives, the platform operator generally needs authorization to provide the investment services of portfolio management, investment brokerage, or contract brokerage. If trading signals for crypto-assets are published, a licensing requirement under MiCAR may apply for portfolio management, the acceptance and transmission of orders for crypto-assets on behalf of clients, or the execution of orders for crypto-assets on behalf of clients. Users of the platform, on the other hand, do not typically trigger any licensing requirements simply by following signals using their own trading accounts. For signal providers, however, it depends heavily on the specific circumstances of each individual case. To the extent that investment decisions are merely published in the provider’s own securities account, this activity does not yet constitute a licensed activity. However, it is always necessary to carefully examine exactly how the signal provider’s trading decisions are implemented in the user’s account. To the extent that the signal provider receives a genuine mandate to execute trading decisions with effect on the user’s securities account, licensing requirements regarding portfolio management or investment brokerage may apply.

    In Individual Cases, the Issuance of Signals May Trigger a Requirement to Register with BaFin

    Even in situations where the act of providing trading signals does not itself trigger a licensing requirement under Section 15(1) WpIG or Section 32 KWG, signal providers may still be subject to a registration requirement with BaFin. This may be the case if the publication of trading signals is classified as an investment recommendation or an investment strategy recommendation. According to the legal definition in Art. 3(1)(35) MAR, investment recommendations are information containing explicit or implicit recommendations or suggestions regarding investment strategies in relation to one or more financial instruments or issuers, intended for distribution channels or the public, including an assessment of the current or future value or price of such instruments. Investment strategy recommendations, by contrast, are described in Article 3(1)(34) MAR as the production of information that directly or indirectly constitutes a specific investment proposal or, directly, a specific investment decision regarding a financial instrument or an issuer. If the publication of trading signals in social trading or signal following constitutes an investment recommendation or investment strategy recommendation in this sense, the signal provider may be required to register this activity with BaFin pursuant to Section 86 WpHG. In addition, the provider must fulfill certain compliance obligations and organize its business operations accordingly. Particularly relevant in this context is the obligation to disclose, report, and avoid conflicts of interest in accordance with Section 85 of the WpHG. Furthermore, the recommendations themselves must meet content requirements, including, among other things, clear indications distinguishing estimates from facts, the disclosure of relevant sources, and the date and time of publication.

    Attorney Dr. Lutz Auffenberg, LL.M. (London)

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      Apr 27, 2026

      Raising Capital Through a Public Offering

      Traditional bank financing is a type of financing involving many hurdles for many companies, especially for startups and SMEs. For one thing, banks typically require collateral before granting loans. For companies that are just getting started, this can already be a difficult—or even insurmountable—obstacle. On the other hand, banks are generally interested in regular payments consisting of interest and principal, and not so much in, for example, profit sharing or a bullet loan. However, these types of repayment or compensation are very attractive to the companies mentioned above. Investors in the capital market can offer such forms of economic participation. When companies and investors in the capital market come together, this often creates economically attractive options for both sides that can serve as interesting alternatives to traditional bank loans. Of course, if such markets were unregulated, they would pose a significant risk to retail investors and open the door to fraud by unscrupulous providers. For this reason, these markets are regulated in Germany by German and European legislation. Within the framework of these regulations, the term “public offering” frequently arises. For which products does this term play a role, and what exactly does the concept entail?

      What is a Public Offering, and in Which Context is it Important?

      Both Regulation (EU) 2017/1129 (the Prospectus Regulation), which regulates public offerings of securities in Europe, and Regulation (EU) 2023/1114, the Markets in Crypto-Assets Regulation (MiCAR), which establishes rules for crypto-asset markets in Europe, the concept of a public offer is of central importance. In both cases, the offering of the respective regulated products, insofar as it constitutes a public offer, is associated with far-reaching obligations for the respective issuers. The legal definitions are also virtually identical. According to the definition in the Prospectus Regulation, a public offer consists of a communication to the public in any form and by any means that contains sufficient information regarding the terms of the offer and the securities to be offered to enable an investor to decide whether to purchase or subscribe to those securities. If an offer constitutes a public offer within the meaning of the foregoing, this typically results in far-reaching obligations for the offerors and issuers. For securities, a published securities prospectus approved by the competent authority is generally required; for crypto-assets under MiCAR, a published and notified crypto-asset whitepaper is mandatory. These documentation requirements may also be accompanied by obligations regarding the distribution channels for the products. Is raising capital through such products therefore only possible if these extensive obligations are fulfilled?

      Exemptions and Private Placements

      The respective regulations do, however, provide for exceptions. For example, a public offering of securities is possible even without the prior publication of an approved prospectus if the offering is directed only at qualified investors or at fewer than 150 non-qualified investors per EU member state. Similar exemptions can also be found in MiCAR for the public offering of crypto-assets. Both regulations, however, also have their own specific exceptions. The regulation of crypto-assets is, in any case, modeled after the regulation of securities under the Prospectus Regulation. The situation is different, however, with so-called private placements. Although the term originates from securities law, the concept of a private placement is not defined in the Prospectus Regulation. Legal literature defines it as an offering that is not public, since a “personal connection” already exists between the issuer or its agent and the investor prior to the offering. Whether a private placement can also apply to crypto-assets has not yet been fully clarified; however, given MiCAR’s alignment with the Prospectus Regulation, there is strong evidence to suggest it does. Based on the above, startups and SMEs in particular can thus raise capital through products such as securities or crypto-assets—even without first fulfilling extensive documentation requirements—by means of clever structuring.

      Attorney Dr. Lutz Auffenberg, LL.M. (London)

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        Apr 20, 2026

        Are Prediction Market Shares Binary Options?

        The exact legal classification of prediction markets and the shares traded on them has not yet been definitively clarified in Germany and depends largely on the specific circumstances of each individual case. In this regard, classification as gambling is a possibility, in which case the State Treaty on Gambling would serve as the regulatory framework and the Joint Gambling Authority of the German States (GGL) as the supervisory authority. On the other hand, however, classification as a financial instrument under the financial market regulations applicable in Germany and the EU, with the Federal Financial Supervisory Authority (BaFin) as the competent supervisory authority, is also a possibility. The regulatory classification of prediction markets or the shares traded on these platforms depends crucially on their content. Specifically, it will therefore also depend on exactly how the respective share is structured. If, for example, a share concerns the outcome of a Bundesliga soccer match in such a way that platform participants bet on the victory or defeat of the participating soccer clubs, the share embodying this could constitute a sports bet. This would fall under the State Treaty on Gaming and thus be subject to supervision by the GGL. The organizer or intermediary of such sports bets can apply for inclusion on the GGL’s so-called whitelist and, upon approval, legally offer sports betting. But what is the situation if the shares were structured as financial instruments?

        Shares as Financial Instruments on Prediction Markets

        One possible structure for such a share, for example, is as a financial futures contract or a derivative transaction. Financial futures transactions are defined as derivative transactions and warrants. Derivative transactions include, among other things, the purchase, exchange, or other structured fixed-term transactions or option transactions that are to be settled at a later date and that depend on an underlying asset such as securities or money market instruments, interest rates, or emission allowance certificates. Furthermore, certain futures transactions relating to commodities, freight rates, climatic or other physical variables, inflation rates, etc., are included. These derivative transactions generally qualify as financial instruments within the meaning of the financial regulations applicable in Germany and the European Union. Shares in a prediction market based on such a derivative transaction should therefore also qualify as financial instruments. As outlined above, BaFin in Germany is generally the competent supervisory authority for the regulatory oversight of transactions involving such financial instruments. It is also BaFin that grants or denies the necessary licenses for the commercial handling of financial instruments. To operate a platform on which users can purchase prediction market shares from the platform operator or other users, the operator would therefore need to obtain a BaFin license, provided that the shares are structured as derivatives.

        How Does the BaFin’s General Ruling on Binary Options Apply?

        Another regulatory hurdle that operators of prediction markets must take into account is the BaFin general ruling dated July 1, 2019, regarding restrictions on the marketing, distribution, and sale of binary options to retail investors. The general ruling is based on a statement by ESMA, which is why the issue is relevant throughout the EU. Binary options are defined in the general ruling as derivative financial instruments that are settled in cash, where payment is only provided for upon settlement or expiration, and where the payout is limited to a predetermined amount or zero, in the event that the underlying asset of the financial instrument meets one or more predetermined conditions and in the event that it does not meet one or more predetermined conditions. In principle, it is therefore conceivable that shares offered on prediction markets could also meet this definition. This depends on the exact structure of the respective shares. Here, for example, the General Ruling also provides for exceptions for binary options that have a minimum term of 90 days, for which an approved prospectus has been published, and where the provider is not exposed to any market risk during their term. Furthermore, the provider or a company within its group may not realize any profit or loss from the binary option other than the previously disclosed commissions, transaction fees, or other associated fees.

        Attorney Dr. Lutz Auffenberg, LL.M. (London)

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          Apr 13, 2026

          Prediction Markets – What’s Behind the Hype?

          Prediction markets are currently the talk of the town and are experiencing a veritable boom. These are online platforms where users can buy and sell so-called contracts that depend on whether one or more specific events occur or do not occur. Popular events that are frequently the subject of these contracts include, for example, election outcomes (particularly in U.S. politics), as well as the outcomes of sporting and cultural events, but also events from the financial world, such as central bank interest rate decisions, corporate data, or stock market indices. These platforms are often decentralized and built on blockchains such as the Ethereum blockchain. Specifically, users of these platforms purchase shares or contracts that bet on either the occurrence or non-occurrence of the event in question. The price of the respective shares is determined by supply and demand regarding the occurrence or non-occurrence of the event in question. If many users bet on the event occurring, the price of the shares that reward the event’s occurrence rises, and the price of the shares that bet on the event’s non-occurrence falls proportionally. If the relevant event occurs and the user has purchased a share targeting that outcome, they receive a predefined payout. The question arises as to whether these contracts constitute bets or financial instruments, and whether such a model is even feasible in Germany.

          Are prediction Markets Gambling or Financial Instruments?

          In Germany, online gambling is generally regulated by the 2021 State Treaty on Gambling and is largely supervised and monitored by the Joint Gambling Authority of the German States (GGL). Financial instruments, on the other hand, are regulated both by European regulations and directives—most notably the Markets in Financial Instruments Directive 2 (MiFID II)—and by German laws such as the Securities Trading Act (WpHG). In Germany, financial instruments and compliance with the relevant regulations are supervised by the Federal Financial Supervisory Authority (BaFin). To date, BaFin has not yet taken an explicit position on the topic of prediction markets and the legal nature of the shares offered. The GGL, however, has. In a blog post dated September 5, 2025, on its website, it issued a strong warning against participating in so-called social betting on prediction markets. According to the GGL, these social bets—which relate to events in public or social life, such as political elections, court rulings, natural disasters, social events, or other non-sporting developments, are not eligible for licensing in the Federal Republic of Germany under the State Treaty on Gambling 2021 due to the high risk of manipulation associated with them and are therefore, in the GGL’s view, illegal gambling.

          Does this Mean that Prediction Markets Cannot Be Operated Legally in Germany?

          Against this backdrop, and particularly in light of the GGL’s statement, one is left with the impression that operating a prediction market platform and participating in or purchasing shares on such a platform is not legally permissible in Germany. However, it seems questionable whether this initial impression is actually accurate. A careful reading of the GGL’s statement reveals that the authority explicitly refers only to “non-sporting events.” The GGL therefore does not address sporting events that are the subject of a contract purchased on a prediction market. In fact, the State Treaty on Gambling expressly provides for the permissibility of betting on defined sporting events with verifiable results and clear rules. Operators could therefore apply to the GGL for a license to organize and/or facilitate sports betting and for inclusion on the so-called whitelist. However, the GGL would have no jurisdiction at all if the social bets and contracts on a prediction market were not gambling but rather financial instruments. The assertion that the operation of a prediction market is not eligible for authorization under the State Treaty on Gambling would then be irrelevant to the regulatory assessment of the platform’s operations. Against this backdrop, it would be conceivable to structure the contracts or share certificates, where possible, as, for example, financial futures or derivatives. The offering of such products is, in principle, legally permissible in Germany provided the relevant authorizations from BaFin are obtained. When planning such business models, it is essential to consider not only the licensing requirements but also any relevant general rulings by BaFin and its general administrative practices regarding the compliance obligations of financial firms. Whether a prediction market platform can ultimately be operated legally in Germany therefore depends heavily on the thoroughness of the business planning and the circumstances of the individual case.

          Rechtsanwalt Dr. Lutz Auffenberg, LL.M. (London)

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            Mar 23, 2026

            Raising Capital Through Securities Issuances – What Are the Options, and What Should Be Considered?

            For many companies, raising funds on the capital market can be an attractive alternative to traditional bank loans. The advantages of raising capital through the issuance of securities lie, on the one hand, in the fact that issuers can determine the terms of the issuance themselves, such as maturity, interest rates, repayment terms, and so on. On the other hand, the funds raised through a securities issue do not necessarily have to be secured by the issuer. However, this last point in particular is usually a prerequisite for a bank to grant a loan in the case of traditional bank loans. Of course, the issuance of securities in the EU and in Germany is strictly regulated, not least for the sake of investor protection. For this reason, issuers must also fulfill various documentation requirements when issuing securities. At the European level, the fundamental regulatory framework for this is provided by Regulation (EU) 2017/1129, also known as the Prospectus Regulation. At the national level in Germany, this is supplemented by the Securities Prospectus Act (WpPG). But when exactly must an issuer prepare a securities prospectus, and are there any exceptions to this rule?

            A Securities Prospectus is the Standard

            The Prospectus Regulation stipulates that securities may only be publicly offered in the European Union following the prior publication of a prospectus approved by the competent authority. Depending on the type of prospectus being prepared—the Prospectus Regulation distinguishes between various types of prospectuses, such as  e.g. the EU Growth Issuance Prospectus, the EU Follow-on Prospectus and the Base Prospectus—the effort involved in preparing each type varies significantly. For example, the maximum number of pages an EU follow-on prospectus may have is 50 DIN A4 pages in printed form. In contrast, for an EU Growth Prospectus, the permissible maximum number of pages is 75 DIN A4 pages in printed form. Generally speaking, the preparation of a securities prospectus requires a significant amount of resources from the preparer. Nevertheless, the preparation, approval, and publication of a securities prospectus can be worthwhile simply because a public offering of securities via such a prospectus also includes the possibility of conducting the offering in EU countries other than the one that approved the prospectus, following prior notification of the prospectus. In addition, the Prospectus Regulation itself provides for exceptions under which a prospectus need not be prepared.

            Are the Exceptions to the Prospectus Requirement?

            The Prospectus Regulation itself provides that it does not apply to certain types of securities. For example, units in closed-end investment funds, as well as securities that are unconditionally and irrevocably guaranteed by a Member State or a local authority of a Member State, are already excluded from the scope of the Regulation. Accordingly, no securities prospectus needs to be prepared for these. Furthermore, the Prospectus Regulation provides that public offerings of securities do not require a previously published and approved securities prospectus if the offering is directed, for example, exclusively at qualified investors or at a maximum of 149 non-qualified investors per Member State. The same applies to offers where the minimum subscription amount or the denomination of the securities is at least EUR 100,000. In addition, the Regulation provides for an exemption from the obligation to publish a prospectus for issuers of securities, provided that the total value of the securities offered in the EU over a 12-month period does not exceed 8 million euros and the Member State in which the issuance takes place has adopted such a threshold. Germany has set the cap at 8 million euros. The current cap of 8 million euros will be raised to 12 million euros in the Prospectus Regulation by the EU Listing Act on June 5, 2026. For such offerings, however, the Securities Prospectus Act currently still stipulates that, for amounts up to a maximum of 8 million euros, issuers must either prepare a securities information sheet (WIB) comprising a maximum of four DIN A4 pages, have it approved by BaFin, and publish it, or that issuers must prepare and publish a Key Information Document (KID) in accordance with the PRIIPs Regulation. Such a Key Information Document does not require approval by the competent supervisory authority. Which documentation must be prepared depends on how the securities being offered are structured. A security that meets the requirements of a “packaged investment product” under the PRIIPs Regulation may only be publicly offered after the publication of a KID. Other securities may only be publicly offered after the preparation, approval, and publication of a WIB.

            Attorney Dr. Lutz Auffenberg, LL.M. (London)

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              Mar 16, 2026

              The Crypto Asset White Paper – What Are BaFin’s Powers Regarding Token Offerings?

              Anyone seeking to offer crypto assets to the public in the European Union must first prepare and publish a crypto asset white paper in accordance with MiCAR regulations. The document must provide detailed information about the token offering. Specifically, Article 6(1) of MiCAR requires that the document include, in particular, information about the provider or—if different—the issuer of the crypto assets, the project behind the crypto assets, the details of the public offering, the rights and obligations associated with the tokens, as well as the risks, technical functioning, and potential adverse effects on the climate or the environment must be presented in the crypto asset white paper. Particularly attractive to initiators of crypto projects is the fact that MiCAR does not require approval of the crypto asset white paper by the competent supervisory authority, which in Germany is BaFin. Under Art. 8(1) MiCAR, the only requirement is that the offeror or issuer submit the final crypto asset white paper to the competent authority. Art. 8(3) MiCAR clarifies in this context that the supervisory authority may not require approval of the document prior to publication. The submission must take place 20 business days prior to the date of publication of the white paper.

              What Specifically is BaFin’s Role in Relation to Crypto Asset Whitepapers?

              At first glance, BaFin’s role regarding crypto asset white papers under MiCAR appears straightforward. BaFin is merely required to forward the crypto asset white paper submitted by the issuer to ESMA within five business days, after which ESMA makes it available in its crypto vasset white paper registry starting on the date the public offering begins. The submission to ESMA must take place within five business days of receiving the white paper. In addition, BaFin is tasked with forwarding, also within five days, the list of Member States—to be provided by the issuer—in which the public offering of the crypto assets is to take place, to the central contact point of the host Member States. In addition to the crypto asset whitepaper, BaFin, as the competent authority of ESMA, must also submit the explanation regarding the legal nature of the crypto assets to be offered, which must be drafted by the issuer and must explain why the crypto asset does not qualify as an e-money token (EMT) or an asset-referenced token (ART). However, Article 8 of MiCAR does not explicitly grant any substantive review authority in any form. Nevertheless, Article 94(1) of MiCAR sets forth certain powers vested in the competent authorities, and thus also in BaFin. The German legislature has specified these powers in Section 16 of the Crypto Markets Supervision Act (KMAG).

              What Regulatory Instruments Does BaFin Have at Its Disposal Regarding Crypto Assets White Papers?

              Art. 94(i) of MiCAR stipulates that competent authorities must have the power to require the persons responsible for a crypto white paper to amend or supplement the document if it does not contain the content required under MiCAR. BaFin may also require amendments to the white paper if this is required for reasons of financial stability or the protection of crypto asset owners. Furthermore, as the competent authority, BaFin has the option to suspend the public offering of crypto assets for up to 30 business days if there is suspicion that provisions of MiCAR have been violated. BaFin’s most stringent supervisory measure is the ability to prohibit a public offering of crypto assets if violations of MiCAR have been identified or if there is a sufficiently well-founded suspicion that such a violation will occur. In accordance with general principles of administrative law, BaFin must always act proportionately when exercising these powers. The German legislature has implemented the suspension and prohibition of public offerings of crypto assets in Section 15 of the KMAG. The authority to require changes to the crypto asset white paper was granted to BaFin under Section 16 of the KMAG.

              Attorney Dr. Lutz Auffenberg, LL.M. (London)

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                Mar 09, 2026

                The Listing Act – What is Changing for Smaller Securities Issuances in European Prospectus Law?

                Regulation (EU) 2024/2809, also known as the Listing Act, was adopted on October 23, 2024, and largely entered into force on December 4, 2024. The Listing Act provides for far-reaching changes to various EU legal acts concerning the European capital market. The aim of the changes is to increase the attractiveness of the capital market in Europe and to significantly simplify capital raising for small and medium-sized enterprises via the local capital markets. This objective has been a perennial issue in European legislation, but unfortunately it has not yet been implemented with sufficient effectiveness through the various measures that have been implemented, most notably the so-called Capital Markets Union. In order to achieve a sustainable strengthening of the European capital market this time, the Listing Act provides for changes not only to the Market Abuse Regulation (MAR), MiFID2, and MiFIR. According to the provisions of the Listing Act, comprehensive changes are also to be made to the Prospectus Regulation, which will be particularly attractive for small and medium-sized enterprises. Some of these changes to prospectus law are already in effect, while others will only apply and take legal effect from June 5, 2026. Issuers and providers of smaller securities issuances should therefore be aware of the upcoming changes and check whether they could result in attractive financing opportunities for them.

                The EU Growth Issuance Prospectus and the EU Follow-on Prospectus

                Regulations governing the new EU growth issuance prospectus and the EU follow-on prospectus have been in force since March 5, 2026. The EU follow-on prospectus can be used by issuers and offerors for public offers of securities and their admission to trading on a regulated market that have been admitted to trading on a regulated market or an SME growth market for at least 18 months without interruption. The form of the EU follow-on prospectus is standardized and may not exceed a maximum of 50 A4 pages in printed form. In addition, it must be written in a comprehensible manner and in a legible font size. The EU growth issuance prospectus may be issued by issuers that qualify as SMEs, as well as by issuers that do not qualify as SMEs, provided that their securities are admitted to trading on an SME growth market or are to be admitted to trading on such a market. In addition, unlisted companies planning an emission with a total countervalue for the publicly offered securities of up to EUR 50 million may also use the EU Growth Prospectus, provided that they did not exceed an average number of 499 employees in the last financial year. Total countervalue must be based on the last 12 months. The EU Growth Prospectus is also a standardized document that must be written in a comprehensible manner and in a legible font size. The maximum number of pages allowed for this prospectus is 75 A4 pages in printed form, which means it can be slightly more comprehensive than the EU Follow-on Prospectus.

                What Changes Will the Listing Act Bring for Small Issuances of Up to EUR 12 Million?

                Previously, the Prospectus Regulation provided for the possibility of an exemption from the obligation to publish a prospectus for issuers of securities, provided that the total consideration of the securities offering in the European Union did not exceed EUR 8 million over a period of 12 months and the Member State concerned, in which the issue was to take place, had decided on such a maximum limit. Germany had set the maximum limit at EUR 8 million, while numerous other member states only allowed exemptions for smaller issue volumes. For public offerings up to a value of EUR 8 million, the German Securities Prospectus Act has since required either the preparation of a securities information sheet consisting of 3 or 4 A4 pages or the preparation of a key information document (PRIIPs KID) in accordance with the PRIIPs Regulation. From June 5, 2026, the Prospectus Regulation, as amended by the EU Listing Act, will provide that public offers of securities with a total value of up to EUR 12 million in the Union will be exempt from the obligation to publish a prospectus. However, the respective member states may decide to lower this threshold to EUR 5 million. This increased threshold will thus enable smaller companies to raise significantly more capital than before without having to prepare, approve, and publish a securities prospectus. However, the obligation to prepare a securities information sheet will continue to apply in Germany.

                Attorney Dr. Lutz Auffenberg, LL.M. (London)

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                  Feb 23, 2026

                  European CASP Supervision – Will ESMA Replace BaFin in MiCAR Supervision?

                  The supervision of crypto service providers (CASP) has become a day-to-day issue for financial supervisory authorities in European member states over the last few years, and especially since MiCAR came into force. Hardly any self-respecting institution can avoid the question of whether its own business areas should be expanded to include crypto assets or whether blockchain technology could be used to improve the technical efficiency of existing business models. The German BaFin, in particular, which was already required to supervise crypto-related business models under national law before MiCAR came into force, has built up considerable expertise in this area in relation to the functioning of crypto assets and the markets in which they are traded. However, the EU Commission is considering withdrawing the supervisory mandate for providers of crypto-asset services from BaFin and, in general, all national financial supervisory authorities in the future and having supervision carried out directly by ESMA, based in Paris. ESMA would then be directly responsible for license applications from crypto asset service providers in accordance with Art. 62 MiCAR. After successfully completing the MiCAR licensing process, ESMA would also take over the ongoing supervision of CASPs from the national supervisory authorities.

                  ESMA’s Jurisdiction Would Apply to All Pure CASPs – Distinction for Entities Notified Under Article 60 MiCAR

                  According to the current draft of the EU Commission for the planned amendments to MiCAR, ESMA would be the competent authority for all companies that have applied for or received authorization under Article 62 MiCAR. With regard to credit institutions, investment firms, or other companies supervised under other regimes that are authorized to offer crypto asset services in addition to their traditional business after successfully completing a notification procedure in accordance with Article 60 MiCAR, the current jurisdiction of BaFin and the Deutsche Bundesbank would remain in place for the time being. However, under the current draft regulation, such companies would have to submit information on their total annual turnover to ESMA on an annual basis, specifying the percentage of turnover attributable to crypto-asset services. As soon as crypto asset services became the company’s main business according to these figures, the supervisory mandate with regard to the supervision of obligations under MiCAR would be transferred from the nationally competent authority to ESMA. The last available annual financial statements approved by the management body of the notified company would be decisive in each case.

                  EU Passporting for CASPs to be Integrated Directly into Authorization

                  Another change planned by the EU Commission concerns the MiCAR passporting regime. In future, crypto-asset service providers will be allowed to provide the crypto-asset services for which they are authorized by ESMA throughout the European Union. This approach seems sensible and understandable, especially since ESMA would be responsible for supervising all crypto-related business anyway. However, it remains to be seen whether the planned changes would actually lead to simplifications. It seems questionable whether the supervision of small and medium-sized CASPs by the Paris-based ESMA in particular can prove to be practicable. Correspondence and supervisory discussions would probably take place largely in English, which could cause difficulties for smaller CASPs. With regard to investor protection, internationalization could also create hurdles for customers of supervised CASPs if they have to turn to an international institution with their concerns instead of being able to contact German-speaking representatives at BaFin and the Bundesbank. One positive effect would certainly be that the already very granular interpretation of MiCAR by ESMA would be further harmonized and differences in the supervisory rigor of national supervisory authorities could be counteracted. However, it remains to be seen whether the EU Commission’s proposals will actually be implemented in this form, as the consultation period for comments from market participants and associations on the proposed amendments has only recently expired and the evaluation of the comments received is still pending. In addition, the proposals would still have to go through the entire EU legislative process, which is rarely, if ever, completed without significant changes.

                  Attorney Dr. Lutz Auffenberg, LL.M. (London)

                  I. https://fin-law.de

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                    Feb 16, 2026

                    Utility Tokens in Transition – Legal Nature Under the German Banking Act (KWG) and MiCAR

                    Since the launch of Ethereum in 2015 and the associated emergence of the smart contract economy, issuing proprietary tokens has become an interesting alternative to corporate financing, especially for startups and tech companies. In the past, issuers of crypto tokens generally attempted to design their tokens as utility tokens. The background to this was the legal situation in Germany at the time, according to which utility tokens were not necessarily classified as financial instruments within the meaning of the German Banking Act (KWG) or the Securities Trading Act (WpIG). BaFin took the view that utility tokens were a subtype of crypto tokens that essentially enabled the purchase of goods or services from their issuer and were therefore conceptually limited to the issuer’s network. Based on this understanding, synonyms for utility tokens were app tokens, usage tokens, or consumption tokens. If the legal requirements were met, crypto tokens could qualify as financial instruments until MiCAR replaced national crypto regulation at the end of 2024. At that time, crypto assets were financial instruments pursuant to Section 1 (11) sentence 1 no. 10, sentences 4 and 5 of the previous version of the KWG and Section 2 (5) no. 10 of the WpIG and were therefore potentially subject to financial services or investment services requiring a license. The definition required that the token in question be accepted as a medium of exchange or payment or serve investment purposes. In the case of utility tokens, these conditions could not be met in individual cases. In such cases, utility tokens were not regulated financial instruments and services relating to them were therefore not activities subject to authorization.

                    Under MiCAR, Utility Tokens are a Clearly Defined Subtype of Crypto Assets

                    Since MiCAR came into force, crypto assets have been defined in Article 3(1)(5) MiCAR as digital representations of a value or right that can be electronically transferred and stored using distributed ledger technology or similar technology. The EU regulation also provides an explicit definition for utility tokens in Article 3(1)(9) MiCAR. According to this, utility tokens are crypto assets that are exclusively intended to provide access to a good or service provided by their issuer. Since the definition requires that it be a crypto asset, these tokens can no longer be considered unregulated items since MiCAR came into force. In any case, they are crypto assets that can potentially be the subject of crypto asset services. Commercial handling of them may therefore trigger licensing requirements under Art. 59 ff. MiCAR. The issuance of these tokens also entails obligations for their issuers and offerors, in particular the fundamental obligation to prepare and publish a crypto asset white paper, with MiCAR regulating specific details in this regard.

                    What are the Advantages for Issuers and Offerors of Such Tokens under MiCAR?

                    Utility tokens are now regulated crypto assets under MiCAR regulations. However, for public offerings of utility tokens, the EU regulation provides for very attractive privileges for issuers and offerors in certain circumstances. For example, Article 4(3)(c) MiCAR stipulates that the provisions of the entire Title II of MiCAR do not apply to public offerings of utility tokens that provide access to goods or services that already exist or are already being provided. Issuers and offerors of such utility tokens therefore have the advantage that they are not required to prepare and publish a crypto asset white paper. Furthermore, they are not required to comply with the strict requirements for marketing communications under Article 7 MiCAR, they are not subject to the transparency requirements under Article 10 MiCAR, and purchasers of the utility tokens are not entitled to the right of withdrawal under Article 13 MiCAR. However, these advantages only apply if the goods or services made accessible via the tokens actually already exist and are available. If, for example, their development or availability is to be financed by the proceeds from the utility token sale, the privileges do not apply. Issuers and providers of tokens that have additional relevant functions besides providing access also do not enjoy these advantages. The definition of utility tokens in Art. 3 (1) No. 9 MiCAR clearly stipulates that utility tokens only exist in the case of crypto assets that exclusively provide access to goods and services of their issuer.

                    Attorney Dr. Lutz Auffenberg, LL.M. (London)

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                    E. info@fin-law.de

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                      Feb 09, 2026

                      Notification Procedure as a Fast Track for Existing Institutions to Obtain a MiCAR License

                      Crypto assets are not financial instruments within the meaning of MiFID2 regulation. This is explicitly clarified in Art. 2 (4a) MiCAR in conjunction with Art. 3 (1) No. 49 MiCAR. Nevertheless, credit institutions and investment firms, particularly in the Federal Republic of Germany, are showing growing interest in trading digital assets. For existing institutions, crypto assets open up new target groups and markets as well as innovative modern product types that attractively expand the product portfolio alongside or in conjunction with traditional MiFID business. In fact, the opportunities to seize these chances are within reach for already licensed credit institutions and investment firms, but also for e-money institutions, UCITS management companies, or alternative investment fund managers, as they can benefit from the notification procedure fundamentally regulated in Art. 60 MiCAR. Article 59(1) MiCAR provides for two options for obtaining authorization to provide crypto-asset services. First, pursuant to Article 59(1a) MiCAR, a company may provide crypto-asset services if it has previously been authorized as a crypto asset service provider. The significantly simpler route is the notification procedure for existing institutions set out in Article 59(1b) MiCAR and regulated in Article 60 MiCAR. According to this, credit institutions, investment firms, e-money institutions, UCITS management companies, and alternative investment fund managers can obtain authorization as providers of crypto asset services by submitting certain information about their planned crypto asset transactions to BaFin without having to go through a full authorization process.

                      Who Can Benefit from a MiCAR Notification?

                      Article 60(1) MiCAR grants authorized credit institutions the option of providing all crypto asset services after submitting a complete notification. For investment firms, the notification option is restricted in that, after successful notification, they may only provide those crypto asset services that correspond to the investment services for which they hold a corresponding license in accordance with MiFID regulations. Article 60(3) subparagraph 2 regulates which MiFID investment services correspond to which crypto asset services. In contrast, pursuant to Art. 60(4) MiCAR, e-money institutions are only permitted to provide custody, administration, and transfer services in relation to the e-money tokens they issue after successful notification. If an e-money institution wishes to offer additional crypto asset services, it must obtain the necessary authorization by submitting an application for authorization in accordance with Article 62 MiCAR. UCITS management companies or alternative investment fund managers may notify crypto asset services for the acceptance and transmission of orders in crypto assets for clients, advice on crypto assets, and portfolio management of crypto assets, provided that they hold the relevant authorizations under the UCITS Directive (2009/65/EC) or the AIFM Directive (2011/61/EC). Finally, market operators authorized under MiFID2 also have the option of taking advantage of the notification procedure. If their notification is successful, they can operate a trading platform for crypto assets.

                      What Requirements Must Be Met and How Long Does the Notification Take?

                      The notification procedure under Article 60 MiCAR is significantly less complex than a full application for authorization under Article 62 MiCAR. In particular, the notifying institution must present a viable business plan outlining how crypto asset services are to be marketed and offered in the future. In addition, it must provide a detailed and complete description of how the institution will adapt its strategies, procedures, and internal controls in relation to the planned provision of crypto asset services. This includes adapting internal procedures for risk management and money laundering prevention, IT security, emergency and business continuity planning, outsourcing management, and all other procedures relevant to regulatory compliance. Specific details are regulated by Delegated Regulation (EU) 2025/303. With regard to the duration of notification procedures, Article 60 MiCAR stipulates somewhat ambiguously for all types of eligible institutions that crypto asset services to be notified may only be provided once the information to be submitted has been transmitted to the competent authority at least 40 working days prior to the initial provision. According to Article 60(8) MiCAR, the competent authority – in Germany, BaFin – must check within 20 working days of receiving the notification whether the information in the notification is complete. If any information is missing, BaFin shall set a deadline for the applicant to provide the missing information, which may not exceed a further 20 working days from the date of the request. It should be noted that the request period does not count towards the 40 working days specified in Article 60(1) to (6) MiCAR. This means that the notification procedure can actually take 60 working days.

                      Attorney Dr. Lutz Auffenberg, LL.M. (London)

                      I.  https://fin-law.de

                      E. info@fin-law.de

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                        Dec 15, 2025

                        The Tokenization of Real World Assets – Can Real Estate Be Tokenized Using RWA Tokens?

                        The tokenization of so-called real-world assets (RWA tokens) is currently one of the hot topics in the blockchain scene. In this context, the term tokenization refers to the technical and, as far as possible, legal connection of a digital token, usually existing on a blockchain, with a specific tangible object, such, as for example, real estate or a wind turbine, or with a specific intangible object, such, as for example, a right. The tokenization of rights continues to enjoy unbroken popularity in the financial sector. The issuance of security tokens, i.e., the public offering of financial products that are linked to a token in such a way that they qualify as securities within the meaning of securities regulation, has become a very popular form of corporate financing. BaFin qualifies such products, which in terms of content often constitute an investment under the German Investment Act, as sui generis securities due to their tokenization. This is the case if the products meet certain requirements in terms of transferability, tradability on the financial market, and the granting of securities-like rights. When issuing an electronic security under the German Electronic Securities Act (eWpG), the qualification of the products as securities has already been carried out by the legislator, so that products issued under the eWpG unproblematically constitute securities. But how can physical objects such as real estate be tokenized?

                        Possible Concepts for Tokenizing Real Estate

                        In principle, the complete tokenization of real estate via RWA tokens, i.e., of land ownership, is not yet provided for in the German legal system. This is primarily because in Germany, the land register is the sole and decisive legal document for assigning land ownership to individuals, and it does not yet allow for digitization, let alone tokenization via RWA tokens. Ultimately, this means that, in general, the person entered in the land register is also the owner of the property in question. However, there are various ways of approaching the tokenization of real estate. One example is the KG model, and another is the subordinated bond model. In both models, the initiator/issuer acquires the property in question and then allows interested investors to participate in it. In the KG model, the initiator would typically establish another company, a trust limited partner. This company would then establish a GmbH & Co KG with the initiator, provided that the latter is a GmbH, whereby the initiator would act as the personally liable partner and the trust company as the (trust) limited partner. Interested investors can then conclude tokenized trust agreements with the trust limited partner, which would transfer the rights of the trust limited partner in the GmbH & Co KG to the investors, i.e., both the rights to profit sharing, as specified in the partnership agreement, and the other corporate rights of a limited partner. In this model, the GmbH & Co KG would be the owner of the property as entered in the land register. The issuance of a subordinated bond is another option for tokenizing real estate. In this case, the issuer usually issues subordinated bonds that are registered in the name of the investor – mostly subordinated loans or subordinated profit participation rights – and tokenizes them. These products grant investors, for example, a share in the profits of the property in question or in the issuer’s corporate profits. In both models, however, the investor does not legally acquire ownership of the properties in question.

                        What Documentation is Required for the Distribution of the Tokens?  

                        As a rule, and if structured appropriately, tokenized products created according to one of the two models mentioned above will qualify as investments under the German Asset Investment Act (Vermögensanlagengesetz). As explained above, BaFin considers these tokenized investments to be securities for regulatory purposes if structured appropriately. In this respect, the regulatory regime for securities applies to their distribution. The volume of the planned issue is a decisive factor here. For issues with volumes of up to EUR 8,000,000, a securities information sheet of no more than four A4 pages is required or, in the case of a product packaged in accordance with the PRIIPs Regulation and provided that the product is offered to retail investors, a key information document (KID). Furthermore, in the case of issuances using a securities information sheet, distribution to non-qualified investors is only permitted if it is carried out by way of investment advice or investment brokerage through an investment services company. For issuances of up to EUR 20,000,000, a so-called EU growth prospectus  could be prepared, approved, and published; for issuances with a volume of more than EUR 20,000,000, a securities prospectus must be prepared by the issuer, approved by BaFin, and published, unless a statutory exemption applies.

                        Attorney Dr. Lutz Auffenberg LL.M. (London)

                        I.  https://fin-law.de

                        E. info@fin-law.de

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