Topic: Financial Institutions

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ESG: German regulator publishes guidance notice on sustainability

The German Federal Financial Supervisory Authority (BaFin) has issued a guidance notice on dealing with sustainability risks (ESG Guidance Notice). The binding German version was published on 20 December 2019 and later editorially modified on 13 January 2020. Further, BaFin has now also made available an English convenience translation. The German regulator had launched a consultation based on … Continue Reading

Tomorrow’s financial services webinar – Prudential regime for investment firms

As previously advertised, this month’s financial services briefing will take place tomorrow in the form of a webinar rather than a seminar. In this webinar we will discuss the proposed approach to the prudential classification of investment firms and the new capital requirements methodology. We will then look at the new reporting requirements and remuneration provisions. … Continue Reading

German regulator publishes English version of guidance regarding outsourcing by insurers to cloud services

The German regulator BaFin has published an English version of its guidelines published in November 2018, Link. The guidance specifies the contractual provisions which BaFin expects to be included in agreements between German regulated insurers, reinsurers and credit institutions and cloud service providers.… Continue Reading

IOSCO consults on UTC clock synchronisation of timestamped events

On 11 September 2019, the International Organization of Securities Commissions (IOSCO) published a consultation paper (CR04/19) recommending that trading venues and their participants synchronise the business clocks used to record the time and date of a reportable event with co-ordinated universal time (UTC). The proposal follows a recommendation from an earlier IOSCO report published in … Continue Reading

German government plans to introduce a cap on insurance commissions

The amount of insurance commissions paid to insurance intermediaries for the placement of life insurance contracts has been a thorn in the side of consumer protection groups and the German insurance regulator BaFin for years. Another area which came increasingly in the focus of the regulator’s attention are payment protection policies and the related remuneration … Continue Reading

BaFin publishes new guidance note on the authorization procedure for credit institutions

The German Federal Financial Supervisory Authority (BaFin) published a new guidance note (Merkblatt) on the authorization procedure for credit institutions. The guidance note provides details on the regulatory requirements for the licensing of credit institutions (e.g. information about the intended business and the applicant, business plan, governance structure, management pursuant, holders of significant participation, capital … Continue Reading

BaFin says that insurers need to be prepared for substantial burdens in their implementation of the new German law transposing IDD

Insurers and other insurance distributors will face significant challenges while implementing the requirements of the German law transposing IDD. Impacts on distribution models, training requirements and increased duties and obligations in distribution will need to be considered. In addition, there are a number of compliance issues, such as conflicts of interest, cross-selling and considerations regarding … Continue Reading

BaFin publishes draft circular on product oversight and governance arrangements for retail banking products

The German Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) has published a new draft circular on product oversight and governance arrangements for retail banking products with the objective of strengthening consumer protection in relation to financial products offered in the market. The draft circular shall govern how financial institutions are expected to control and manage the … Continue Reading

German law transposing Insurance Distribution Directive (IDD) passed (in revised version) – final guidance on training requirements remains outstanding

The legislation transposing the IDD into German law has been passed (as resolved by the German Parliament on 28 June 2017 and by the Federal Council of Germany on 7 July 2017). One of many changes will be that the transposed IDD will be applicable to all insurance distributors (Versicherungsvertreiber), including insurers. In addition to … Continue Reading

Brexit workshop for foreign issuers of securities organized by BaFin

On May 2017, the German Federal supervisory authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) organized a workshop for foreign issuers of securities. BaFin representatives held various presentations on the possible consequences of Brexit. Three major questions were discussed taking into account various Brexit scenarios: Which issuers of securities prospectuses are concerned? What are the effects on … Continue Reading

German regulators work on proposals for “Small Banking Box” regulation

The German Federal Financial Supervisory authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) and the German Central Bank (Deutsche Bundesbank) are currently working on a draft proposal for the so-called “Small Banking Box” regulation. The aim of the “Small Banking Box” is to specify the principle of proportionality in banking regulation. The new proposal suggests that small and … Continue Reading

German regulator publishes additional information requirements regarding equity funds

On 4 April 2017, the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) published its interpretation decision (the “Decision”) regarding information to be provided in the sales prospectus. BaFin’s decision addresses the latest discussion about “closet indexing”; which means that  the management of an investment fund is described as “active” in the sales prospectus … Continue Reading

Third regulatory survey on low yield environment

The German Central Bank (Deutsche Bundesbank) and the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) have conducted a survey on the revenue situation and resilience of German banks in the low yield environment. The previous surveys in 2013 and 2015 have shown that the low interest rate environment poses continuous negative challenges on … Continue Reading

Brexit: BaFin has launched new web pages for foreign companies in the financial sector

The Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) has launched new pages on its website for foreign companies in the financial sector. On these new web pages, BaFin provides information regarding: communication; procedures; internal risk models; outsourcing and securities prospectus. The web pages also contain a new Brexit FAQ catalogue in which BaFin … Continue Reading

New law on the reorganisation of bank resolutions

The German Government has begun to reorganise national financial stability tasks which are due to be completed by 2018. As a first step a new “Law on the reorganisation of the tasks of the Federal Financial Market Stability Authority” (Gesetz zur Neuordnung der Aufgaben der Bundesanstalt für Finanzmarktstabilisierung – FMSANeuOG) has been published in the … Continue Reading

BaFin publishes consultation paper regarding the amendment of the Circular for the investment of guarantee assets

The Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) has published a consultation paper outlining amendments to the circular relating to the investment of guarantee assets of insurance companies (Kapitalanlagerundschreiben – the “Circular”). The Circular shall specify the German investment ordinance (Anlageverordnung – the “Investment Ordinance”) which has been effective since 22 April 2016 … Continue Reading