CRZBY Commerzbank Ag (PK)

BERLIN--Germany's upper house of parliament, the Bundesrat, on Friday approved a law on ring fencing German banks' risky activities from customer deposits.

Under the legislation, banks with proprietary trading, high-frequency trading or hedge-fund-financing operations that make up either 20% of the balance sheet value or surpass 100 billion euros ($132.7 billion) in value will be required to transfer their risky businesses into legally and financially separate units.

In addition, the law requires that banks submit wind-down and contingency plans in case of financial trouble. The law is due to come into effect in 2016.

Write to Harriet Torry at harriet.torry@dowjones.com