Everything you need to know about the tied agent model under MiFID II: legal framework, requirements, benefits, and how it works in practice across Europe.
A tied agent is a natural or legal person that provides investment services on behalf of, and under the full responsibility and liability of, a licensed investment firm. Defined under Article 29 of MiFID II (Directive 2014/65/EU). In Germany, tied agents are called vertraglich gebundene Vermittler, regulated under the German Securities Institutions Act, and registered in the BaFin public register. They do not need their own securities license.
A tied agent is a person or entity that provides investment services — such as investment brokerage or investment advice — on behalf of, and under the full responsibility and liability of, a licensed investment firm. The concept is established under Article 29 of MiFID II (Directive 2014/65/EU) and is recognized across the European Economic Area.
The model allows qualified professionals to participate in the regulated investment services market without obtaining their own license. Instead, they operate under the license of the investment firm that appoints them, which assumes supervisory responsibility and liability for their activities.
In Germany, tied agents are known as “vertraglich gebundene Vermittler” (contractually bound intermediaries) and are regulated under the German Securities Institutions Act. They must be registered in the public BaFin register.
A tied agent acts on behalf of one investment firm. Within the scope approved by that firm, it may work on mandates involving multiple fund managers. The firm holds the license; the agent operates under it.
In Germany, tied agents are registered with BaFin and appear in the public register. This provides transparency for investors and business partners.
The licensed investment firm is legally responsible for the activities of its tied agents. This includes supervisory duties, compliance oversight, and liability for client interactions.
Tied agents can provide specific investment services as defined in their registration, typically investment brokerage, investment advice, or both. Under substnz, tied agents are released for investment brokerage.
The tied agent does not need to obtain their own securities license. This significantly reduces the cost and complexity of entering the regulated market.
When the investment firm’s license is passported under MiFID II, the tied agent can serve clients across multiple EEA countries through a single regulatory framework.
The tied agent model is used by a wide range of capital markets professionals. Common profiles include independent placement agents with established investor relationships, former heads of distribution or investor relations at asset managers, wealth advisors expanding into alternative investments, and small teams that want institutional-grade regulation without institutional overhead.
In the context of alternative investments — real estate, infrastructure, private equity, venture capital, private credit — tied agents typically work with professional and institutional investors. They source mandates, market investment products, and facilitate capital commitments, all under the regulatory umbrella of their appointing firm.
The tied agent concept is established under Article 29 of MiFID II (Directive 2014/65/EU). In Germany, it is implemented through the German Securities Institutions Act and the related BaFin regulations for tied agents.
A tied agent operates under the license and liability of a specific investment firm and is limited to the services defined in their registration. An independent financial advisor typically holds their own license or operates under a different regulatory regime, and may advise across a broader range of products.
A tied agent acts on behalf of one investment firm. Within the scope approved by that firm, it may work on mandates involving multiple fund managers.
Tied agents must meet fit-and-proper requirements defined by the regulator. This typically includes relevant professional experience, clean regulatory and criminal records, and adequate knowledge of the financial products and services they will offer.
The appointing investment firm is responsible for supervising its tied agents. This includes compliance monitoring, regular reviews, training requirements, and reporting to the regulator. The regulator (e.g., BaFin in Germany) oversees the investment firm and its supervisory practices.
No. Both natural persons (individuals) and legal entities (companies) can be registered as tied agents. Small teams and boutique firms commonly use this model to access the regulated market.
Haftungsdach (liability umbrella) is the German term for the arrangement where a licensed investment firm assumes liability for its tied agents. It is the practical implementation of the MiFID II tied agent model under German securities law.
substnz Capital Partners provides the regulatory infrastructure for tied agents across Europe. Get in touch to learn how it works.