Articles of the Association

Articles of Association

of the Federal Association of Loan Purchase and Servicing (‘Bundesvereinigung Kreditankauf und Servicing’or BKS)
Approved and compiled in the Protocol of the general assembly of 16th June 2017

§ 1 Name, place of business, fiscal year

(1) The association bears the name „Federal Association of Loan Purchase and Servicing“ (hereinafter called „Association“). It is to be recorded in the Register of Associations. It will thereafter carry the addition „Reg. Ass.“ (German: „e.V.“).

(2) The Association has its place of business in Berlin.

(3) The fiscal year is the calendar year.

§ 2 Purpose of Association

(1) The activity of the Association is not directed toward business operations. The purpose of the Association is

a) to define and pursue the professional interests of companies and managers responsible for non-performing loans in Germany, to the extent that they have acquired the loans, regardless of if they own, manage or make use of them as so-called „servicers“ or “investors”.

b) to create, further develop and establish uniform rules and standards for the transfer, trade, and management of non-performing loans.

c) to participate in legislative projects that affect and influence the work of loan portfolio managers and their companies.

d) to promote the exchange of ideas and experiences of loan portfolio managers beyond the boundaries of the profession and the industry.

e) to maintain and support the reputation of this profession, especially through the formulation, maintenance, and further development of professional and so-called “corporate governance” rules.

f) to promote the education and advance training of servicers and investors, including the promotion of trainees as well as the academic research and teaching.

g) to maintain international contacts.

(2) The purpose will especially be fulfilled through

a) conferences, meetings, discussions, educational and advanced training events, and measures (including events relating to national politics and association politics) as well as internal working groups.

b) intensive dialogues with decision-makers in business and politics and representation of professional interests toward them and the public.

c) publications, announcements, and communications to the members and the public regarding all relevant legal and professional topics by using print and online media.

d) the development of consistent guidelines for the legally compliant capital market trade and for the management of non-performing loans within the German jurisdiction.

e) the initiation of regular meetings and further events that are intended to serve the maintenance of both professional and personal relationships between the members, both at regional and nationwide level.

f) the cooperation with other relevant organizations, especially professional associations on the national, European, and international level, as well as standardisation associations who set the rules for the cross-border or national trade with non-performing loans.

g) the publication of press information and press releases.

h) further group-oriented service, consulting and supporting offers that can be realized by the Associations on its own or together with a third party.

(3) The Association is selfless and independent from political parties; it does not primarily pursue commercial goals of its own. The funds of the Association may only be used for the statutory purposes. The members do not receive any share of the profits and their capacity as members does not give them any other benefits from the Association’s funds. No person may benefit from expenses that go counter to the purpose of the Association or result from disproportionately high compensation.

§ 3 Membership

(1) Any natural or legal person who is predominantly involved in the professional acquisition, trade, management, or realization of non-performing loans and who does not predominantly own the loan claims as first owner, can become a member of the Association.

(2) Any natural or legal person who agrees with the purposes of the Association and wishes to support it through his/her contributions, may become a supporting member.

(3) Membership cannot be transferred. The exercise of the rights of members cannot be transferred to another member. Legal persons must name an individual and a deputy who for them are to pursue the rights stemming from the membership.

(4) The application for admission must be made in writing. The Steering Committee decides regarding the admission of new members. In case of rejection, the applicant must be informed of this in writing. Within one month after the rejection has been received, the applicant may file an appeal in writing, regarding which a decision will be reached by the next annual General Meeting. The appeal decision is to be delivered in writing. There is no right to membership.

(5) A membership is terminated through withdrawal, exclusion, death (individuals) or through dissolution (legal entities) of the member or termination of the liquidation and the resulting cancellation in the register of associations.

(6) Withdrawal from the Association must be declared in writing to the President or Managing Director and can be made with a notice period of six months to the end of the calendar year.

(7) A member can only be excluded for good cause. Good causes are especially the violation of duties according to the articles of Association, arrears in the payment of contributions for at least one year, a behaviour damaging to the Association’s purpose or a criminal judgement against a member or his legal representative which makes the continuation of the existing membership relation unreasonable; a criminal order is equivalent to a criminal judgement. Any conduct that is damaging to the Association’s purpose is deemed to be any conduct that

a) can be directly or indirectly attributed to a member of the association

b) was likely to jeopardise or damage the purpose of the Association and/or damage the reputation of the profession or the Association, and

(c) makes it unreasonable for the Association to continue the existing membership relation.

The Steering Committee decides on the exclusion; the member concerned is excluded from the vote. In addition to the President, the Managing Director also has the right to make suggestions. Except in cases of contribution arrears, the President must submit to the respective member, at least two weeks before the meeting of the Board at which a decision is to be made regarding the exclusion, a copy of the exclusion application together with a justification. The entire Steering Committee must be informed of any written statement by the member involved. The member is informed of the exclusion decision by the Steering Committee in writing and is effective as of delivery. Within one month, the member may file an appeal against the exclusion with the General Meeting, which is to be addressed to the President. The General Meeting makes the final decision; the member concerned is excluded from the vote. Ordinary legal action through general courts of law may be taken against the decision.

The decision may only be contested by legal action through general courts of law within one month from the decision’s date. If the member was not present when the decision has been made, the period of one month shall begin to run from the date of receiving the written notification of the exclusion. In the event of a decision of exclusion, the membership rights and the position of the excluded member shall end or be suspended with immediate effect, irrespective of any legal action.

(8) Instead of member’s exclusion, penalties for behaviour witch causes damage to the purpose of the Association, the violation of duties according to the present Articles of Association or arrears in the payment of contributions for at least one year could be imposed as a milder means of order:

a) the admonition in the General Meeting,

b) the revocation of the right to vote in the General Meeting for a maximum of two years,

c) the revocation of the right to vote and to stand for office for a maximum of two years,

d) the removal from office,

(e) the suspension of membership.

The association penalties can be imposed individually or in parallel. Paragraph 7 shall apply accordingly.

(9) If an investigation has been initiated against a member of the Steering Committee or his legal representative on suspicion of a criminal offence, the member or his legal representative may be temporarily removed from office (suspension) until the investigation is closed; in this respect, the fourth to twelfth sentences of paragraph 7 shall apply accordingly.

(10) When a membership is terminated, there is no claim to a share of the Association’s assets.

§ 4 Statutory organs of the Association

(1) The statutory organs of the Association are

(a) the General Meeting

(b) the Steering Committee

(c) the Managing Director

(d) the Advisory Board.

(2) The General Meeting can decide to form further organs or bodies of the Association.

§ 5 Rights and duties of the members

(1) All members pay membership fees, the amount and due date of which are specified by a fees schedule, which is adopted by the General Meeting at the recommendation of the Steering Committee for each following fiscal year.

(2) Provided they are not only supporting members, all members are authorised to participate in the events, elections and voting by the Association and to use of all further services within the framework of the statutory regulations. This right is tied to the fulfilment of the duty to pay membership fees.

(3) Supporting members are to be included in the activities of the Association in a suitable way. Especially the publications of the Association, offers for further training and professional support as well as other suitable events of the Association should be made available to them. The Steering Committee makes decisions regarding this.

(4) Individual members, who are not, or are no longer, active as loan portfolio managers, are maintained as supporting members of the Association. However, if they are members of the entire Board of Management or of the Steering Committee, they will continue to have membership rights and hold their office until their term of office has ended. All members must without delay inform the Managing Director of the fact that they have begun, interrupted or ended their main professional activity as a loan portfolio manager. Members who do not comply with this rule may be excluded for good cause.

(5) Every member is obliged to inform the Association, immediately, in writing, and without being requested, of any change in her/his business, residence or registered address and name. The costs arising to the Association from corresponding investigations must be reimbursed by the member. The costs arising to the Association for legal action for the assertion (in court) of claims against a member must also be reimbursed to the Association by the member.

§ 6 Steering Committee, Advisory Board, Managing Director

(1) The Steering Committee consists of the President, two Vice Presidents, the Treasurer and up to five committee members of the Steering Committee. Only representatives of members who are not supporting members can be elected for the office of President, Vice President and Treasurer. Eligible for the office of further committee members may also be representatives of supporting members. The number of representatives of supporting members among the committee members must be limited to a maximum of two.

(2) The Association is represented judicially and extrajudicially by two members of the Board of Management together. If a Managing Director has been appointed, the Managing Director may represent the Association together with a member of the Board of Management; in urgent cases or in case of being prevented, by the Managing Director as sole representative.

(3) The President, the Vice Presidents and the Treasurer are elected by the General Meeting for the duration of two years, further members of the Steering Committee for a period of one year. For all offices, except those of the members, separate voting is held. Re-election is permitted. The Board of Management remains in office until a new election. If a member resigns during her/his term in office, the Board of Management can elect a substitute member for the remaining term of office of the resigning member.

(4) The Steering Committee conducts the business of the Association and performs all tasks unless they are assigned to a different organ of the Association by the Articles of Association or by law.

The Steering Committee especially has the following tasks:

a) The preparation and execution of the conferences and further events of the Association, the publishing of its publications and notices, and the professional representation towards parliaments and governments.

b) The implementation of the decisions of the General Meeting.

c) The convening, preparation, and execution of the meetings of the General Meeting. the President or one of the Vice Presidents chairs the meetings of the Steering Committee and the General Meeting.

d) The creation of a project and financial plan for each fiscal year, accounting, creation of the annual report, as well as fulfilling the corresponding legal and regulatory duties.

e) Placing orders as well as concluding and terminating work contracts, contracts for services and other contracts that are concluded with third parties in support of the fulfilment of statutory tasks of the Association.

f) The admission of new members and participation in the exclusion of members.

g) The appointment and dismissal of the members of the Advisory Board.

(5) In order to fulfil their task and duties, the Steering Committee can employ a Managing Director. Based on a recommendation by the President, the Managing Director is elected by the members of the Steering Committee for the duration of the term of office of the President.

(6) If a Managing Director has been appointed, he/she conducts the Association’s business at his/her own responsibility, based on the instruction from the Steering Committee. It is especially incumbent on him/her to properly manage the budget resources, place orders and conclude and terminate work contracts, contract for services and other contracts that are concluded with third parties in support of the fulfilment of the Association’s statutory tasks, as well as to conduct the internal and external communication. In his/her management he/she is excluded from the limitations of §181 of the German Civil Code (BGB). He/she is accorded a suitable compensation for his/her activities, based on a special agreement which also governs the further rights and duties.

(7) The Managing Director is accountable to the Steering Committee. The President is authorized to issue instructions to him. The Managing Director is authorized to participate in the General Meetings and the meetings of all organs of the Association with an advisory vote, except for matters dealing with decision-making regarding himself.

(8) The President, Vice-Presidents and Treasurer jointly form the Board of Management in the sense of § 26 of the German Civil Code (BGB) (Representative Committee).

(9) The Steering Committee appoints the Chairman of the Advisory Board and the other members for the duration of two years. A reappointment is permitted. The Advisory Board advises the Steering Committee in the fulfilment of its tasks. The Chairman of the Advisory Board is authorized to participate with an advisory vote in the General Meetings and the meetings of all organs of the Association, except for matters dealing with decision-making regarding himself.

(10) The Advisory Board is charged especially with developing and maintaining uniform guidelines for the legally compliant capital market-oriented trade and for the management of non-performing loans under German jurisdiction as well as for professional standards for managing loan portfolios. Based on a request by the Steering Committee, these are decided by the General Meeting.

(11) The Advisory Board meets at least once every fiscal year; the Steering Committee is to meet twice. Minutes of the meetings are to be kept. The meetings of the Steering Committee and of the Advisory Board are not open to the public. Minutes of the meetings may, however, be reviewed by the members. The Steering Committee and the Advisory Board are to establish rules of procedure for themselves.

(12) The members of the Steering Committee and of the Advisory Board carry out their duties on an honorary basis. The Steering Committee makes decisions regarding the reimbursement of disbursements and expenditures.

§ 7 General Meeting

(1) The General Meeting comes together at least once a year at the invitation of the Steering Committee. An extraordinary General meeting is to be convened if the Steering Committee decides to convene it for urgent important reasons or if a tenth of the members request in writing, that the President convene such a meeting, while specifying the reasons. All members of the Association are authorized to participate in the General Meeting. Supporting members are not entitled to vote at elections and decision-making voting. Every other member has one vote. Members (legal entities) who have acquired membership also for affiliated companies (group membership) by reduced contribution in accordance with the membership fees schedule, are authorized to vote also for the affiliated company. Through group membership, however, the member may not have more than a maximum of two votes.

(2) The General Meeting is convened in writing by the President or the Managing Director, with a notice period of at least two weeks, while specifying the agenda. The notice period begins on the day following the mailing of the letter of invitation. The letter of invitation is regarded to having been delivered if it was sent to the last specified address of the Representative Committee. As an invitation also suffice to send an email to the last known email address of the member.

(3) The General Meeting determines the guidelines of the Association’s activities and deals with all basic questions and matters in this regard, especially:

a) election and discharge of the Steering Committee,

b) election of two annual accounts auditors,

c) determination of the membership fees and decision regarding the fees schedule.

d) acceptance of the report and accounts from the Steering Committee.

e) appointment of honorary members that are recommended by the Steering Committee.

f) decision-making regarding applications to the General Meeting.

g) decision-making regarding changes to the Articles of Association.

h) dissolution of the Association.

(4) The meetings of the General Meeting are chaired by the President, and by one of the Vice-Presidents is case of him being prevented. Every properly convened General Meeting has a quorum. All decisions are taken with a simple majority of the members that are present and entitled to vote. Changes in the Articles of Association require a two thirds majority of those present, whereas decisions regarding changes in the purpose of the Association or the dissolution of the Association require a majority of three-fourths of those present. They can only be made if the wording has been made known in advance in the written invitation. Minutes must be kept of the General Meeting of the Association. The chair of the meeting and the Managing Director underwrite the accuracy of the minutes.

(5) In principle, all elections and voting are held by a show of hands. If, in individual cases, at least one tenth of the members that are present object, secret voting is carried out. In case of a tie vote, the President’s vote decides.

(6) The General Meeting elects the President, the Vice-President and the Treasurer individually and with a simple majority of the members present. In case of a tie vote, a second vote is held. Should the vote again be tie, selection is made by lottery.

(7) The General Meeting elects the committee members in a voting block election procedure. The number of votes is determined by the number of offices to be filled. If there are more candidates for election than the numbers of offices to be filled, the members must cast all votes, but may only give one vote to each candidate, otherwise the vote counts as invalid. The candidates who receive the most votes are elected. In case of a tie vote, a run-off vote is held according to the second and third sentences.

§ 8 General, coming into effect of the Articles of Association

(1) The General Meeting transfers to the Steering Committee the right to determine changes in The Articles of Association that are required by the authorities (district courts, tax offices and others) within the framework of their jurisdiction These changes may neither substantially change the purpose of the Association nor limit the rights of its organs and members.

(2) The Articles of the Association take effect when they are entered into the Register of Associations Berlin-Charlottenburg.



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