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The German regulatory practice has been to treat bitcoin as a unit of account and thus a financial instrument. Consequently, commercial services involving bitcoin and other cryptocurrencies (including trading, brokerage, operating exchanges, investment advisory ) are regulated activities, requiring the relevant authorisation of Germany’s Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, or BaFin). On 25 September 2018 the Higher Regional Court of Berlin decided that bitcoin is not a financial instrument and that the operation of…
Unlike in most other European jurisdictions the regulatory practice in Germany has been to treat Bitcoins as units of account and as such financial instruments pursuant to Section 1 German Banking Act (Kreditwesengesetz, “KWG”). The practical consequence of this is that most commercial services surrounding Bitcoins and other cryptocurrencies (including trading, brokerage, operating exchanges, investment advisory etc.) will be regulated activities, requiring the relevant authorisation (licence) of the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht,…
In a decision of 9 June 2016, the German Federal Court of Justice (Bundesgerichtshof, “BGH”) has ruled that the determination of the close-out amount in a netting provision based on the German Master Agreement for Financial Derivatives Transactions (Rahmenvertrag für Finanztermingeschäfte or DRV) is not legally effective in the event of insolvency to the extent that it deviates from section 104 of the German Insolvency Code. The reasoning of the decision has now been published…
In a decision of 9 June 2016, the German Federal Court of Justice (Bundesgerichtshof, “BGH”) has ruled that the determination of the close-out amount in a netting provision based on the German Master Agreement for Financial Derivatives Transactions (Rahmenvertrag für Finanztermingeschäfte or DRV) is not legally effective in the event of insolvency to the extent that it deviates from section 104 of the German Insolvency Code. The reasoning of the decision has now been published…
In a decision of 9 June 2016, the German Federal Court of Justice (Bundesgerichtshof, “BGH”) has ruled that the determination of the close-out amount in a netting provision based on the German Master Agreement for Financial Derivatives Transactions (Rahmenvertrag für Finanztermingeschäfte or DRV) is not legally effective in the event of insolvency to the extent that it deviates from section 104 of the German Insolvency Code. The reasoning of the decision has now been published…
The 11th senate of the German Federal Supreme Court again had to deal with the duties of a bank recommending interest rate swap agreements. In this context, the German Federal Supreme Court re-affirmed on 22 March 2016 – XI ZR 425/14 – its position that a bank dealing with a customer interested in the conclusion of an interest rate swap has a core duty to advise this customer. In this context, the bank also has…
The German banking market is on the move. This presents opportunities for foreign investors who would like to enter the German financial market. However, in order to acquire an interest in a German financial institution, i.e. credit or financial services institution, an investor has to comply with a couple of specific regulatory requirements. To continue reading, please click here to view the entire Reed Smith Client Alert.…