After the European Securities and Markets Authority (ESMA) had issued a public statement regarding the application of MiFID II requirements on the recording of telephone conversations on 20 March 2020 (see the related publication in our blog), the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) published additional guidance to market participants on the same day.
Client-related requirements
BaFin stated that it cannot grant a formal waiver from the conduct of business rules set out in Part 11 of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG) or from other client-related information requirements. However, BaFin intends to exercise its administrative discretion and will at least not prosecute violations of client-related requirements such as
- the recording of the content of telephone conversations according to Sec. 83 (3) WpHG
- or the provision of suitability reports and ex-ante cost information in good time,
provided that the respective institution takes suitable substitution measures to close the documentation or information gap resulting from such violation and provided that it informs the client in a comprehensible manner.
Other relief measures of BaFin
BaFin has taken further measures to deal with the impact of the COVID-19 pandemic on the financial sector. In order to give supervised entities a better overview of these relief measures, BaFin has published a related website that compiles information on the actions taken by the German and European authorities and that sets out a list of continuously updated FAQs (see the related publication in our blog).
