Credit and financial services institutions, which in the course of providing financial services are authorised to obtain ownership or possession of funds or securities of customers, must have at least two management board members, who must be “fit and proper”. Being a “fit” person means that the persons concerned have acquired sufficient theoretical knowledge and practical experience during their professional careers to date to enable them to carry out their new jobs properly. The Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) consults the Federal Central Criminal Register (Bundeszentralregister) and the Central Trade and Industry Register (Gewerbezentralregister) in order to verify that they are “proper” (i.e. reliable) persons.
Administrative and supervisory bodies are also subject to similar regulatory requirements. Compliance with the regulatory eligibility requirements for management board members or members of administrative/supervisory bodies must be evidenced by relevant documents and forms in the course of BaFin notification.
Recently, BaFin has published the English translation of the Guidance Notice on Management Board Members pursuant to the German Banking Act (Kreditwesengesetz – KWG), the German Payment Services Supervision Act (Zahlungsdiensteaufsichtsgesetz – ZAG) and the German Capital Investment Code (Kapitalanlagegesetzbuch – KAGB) on its website which specifies the requirements a designated management board has to comply with under the German regulatory regime in order to be admitted for its designated role. BaFin has also published the English version of the Guidance Notice on Members of Administrative and Supervisory Bodies. The original guidance notices in German language were published previously on 4 January 2016.
The two guidance notices set out the relevant notification requirements. They specify the forms and documents required for notification with BaFin. Explanatory details on the eligibility criteria (e.g. appropriate theoretical and practical knowledge, management experience, reliability and conflicts of interest) are provided as well.