In its Circular 5/2017 (Money Laundering) of 24 May 2017 BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) has commented on appropriate business-related safety systems within the meaning of section 25h para. 1 sentence 1 KWG (German Banking Act).
In BaFin’s view, “appropriate business-related safety systems” also include the documentation and storage of correspondence exchanged by staff members of an institution via the chat functions of trading programmes (such as Bloomberg, Reuters). The recording and storage requirement is to apply to chats and messages to the extent that they are related to transactions at the respective trading platform and/or business relations with the parties involved in such transactions. According to BaFin, such recordings are to be maintained for an appropriate term which should not be less than ten years.
The reason for publishing the Circular were circumstances relating to the public prosecutor’s investigations (particularly in relation to cum/ex trades) of which BaFin had obtained knowledge according to which chat functions have been used for making arrangements which possibly constitute criminal offences. In accordance with section 25h para. 1 sentence 1 and 2 KWG, institutions shall have appropriate risk management systems and apply procedures and principles for the prevention of other criminal acts (except for money laundering and terrorist financing) that could put at risk the institution’s assets.