Following a nine-month monitoring phase, the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) has decided not to prohibit the distribution of credit-linked notes to retail clients. The Supervisory Authority monitored the issuance and distribution of these products intensively until the end of September 2017, and established that the voluntary commitment made by the German Banking Industry Committee (DK) and the German Derivatives Association (DDV) was broadly adhered to and protected retail investors sufficiently.…

With the general administrative act of 8 May 2017 issued pursuant to section 4b (1) of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG), the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) restricted the marketing, distribution and sale of financial contracts for difference (CFD) (a description can be found here). New CFD contracts with an additional payments obligation may no longer be offered to retail clients since the implementation period expired on 10…

BaFin has issued a warning regarding the risks of initial coin offerings. BaFin points out that the acquisition of cryptocurrency coins – also referred to as tokens, depending on their form – as part of so-called “initial coin offerings” (ICOs) may result in substantial risks. Investors should be prepared for the possibility of losing their investment completely. According to BaFin the numerous downside risks include: significant price fluctuations; no liquid secondary market; no tested business…

The German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) has published  guidance regarding supervisory requirements on IT-infrastructure (Bankaufsichtliche Anforderungen an die IT (BAIT)). The new BAIT is the cornerstone for IT security.  It supplements the general “Minimum Requirements towards the Risk Management” (Mindestanforderungen an das Risikomanagement (MaRisk)) which have been amended and updated recently. View a German summary of the BAIT.  …

On 2 November 2017 BaFin published an updated version of the MaComp Circular. The MaComp (Minimum Requirements for the Compliance Function and Additional Requirements Governing Rules of Conduct, Organisation and Transparency pursuant to Sections 31 et seq. of the Securities Trading Act (Wertpapierhandelsgesetz – WpHG) for Investment Services Enterprises) comprise all publications concerning the conduct of business rules set out in sections 31 et seq. of the WpHG. The Circular has been amended to reflect…

BaFin issues the Draft of the Second Regulation to Amend the Liquidity Regulation, including the amended reporting forms, for consultation. Reason for the amendment: Pursuant to Article 412 (5) CRR, Member States may maintain national provisions in the area of liquidity requirements before binding minimum standards for liquidity coverage requirements are fully introduced in accordance with Article 460 CRR. By 1 January 2018, the liquidity coverage ratio (LCR) will have been gradually raised to 100…

The German Banking Industry Committee (GBIC) has commented the proposals put forward in the discussion paper on the EBA’s approach to financial technology and answered the specific questions the EBA detailed in such paper. The European Banking Authority (EBA) published a Discussion Paper on its approach to financial technology (FinTech) on 4 August 2017. The EBA set out in the Discussion Paper the results of the first EU-wide FinTech mapping exercise and its proposals for…