Undertakings already being supervised and those thinking of applying for authorisation can gain some idea here of supervision and many associated subjects. In addition to guidance on the authorisation procedure, this section also includes, among other things, explanations of the requirements that supervisory law imposes on market participants in Germany.
Banks & financial services providers
A properly functioning banking and financial services system is indispensable for the performance potential of a country's economy. An efficient banking supervision system is therefore essential for the whole economy. The Single Supervisory Mechanism (SSM), launched on 4 November 2014, is supposed to ensure the resilience and solidity of the European banking system and to enhance financial integration and stability throughout Europe. As Germany’s national competent authority (NCA), BaFin forms an integral part of the new European banking supervision system. At present, BaFin supervises around 1,740 banks and 674 financial services institutions in Germany.
Insurance undertakings & pension funds
All private and public insurance undertakings which carry on private insurance business within the scope of the Insurance Supervision Act and have their registered office in Germany are subject to supervision either by BaFin or by the supervisory authorities of the Federal States. Pension funds have also been subject to insurance supervision by BaFin under the Act since the beginning of 2002, as have domestic reinsurance undertakings since December 2004.
Stock exchanges & markets
Listed companies and market participants must comply with various regulations under the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG). BaFin is responsible for monitoring whether they do so. Insider trading and market manipulation are prohibited. The obligations incumbent on companies include having to publish ad hoc notifications and regular financial reports and having to report managers’ transactions and market participants' voting rights notifications.
German asset management companies and investment funds
BaFin supervises German asset management companies (Kapitalverwaltungsgesellschaften) and investment funds offered by such companies under the German Investment Code (Kapitalanlagegesetzbuch – KAGB). At present, over 6,000 domestic funds and about 260 domestic management companies are supervised by BaFin (as at 31 December 2014).
Company start-ups and fintech companies
There is still no clear definition of the concept of a fintech company. Combining the words “financial services” and “technology”, fintech companies are commonly understood to be young undertakings that provide specialised and in particular customer-oriented financial services using technology-based systems.
Prevention of money laundering
All companies in the financial sector are expected to have formal business policies to prevent transactions with a criminal background and to work towards detecting and combating such transactions. This is of particular relevance to transactions that support money laundering or terrorist financing and other criminal offences that may jeopardise the assets of an institution. Such criminal activities may not only threaten the reputation and financial strength of an institution that is abused for these purposes, but may also endanger the integrity and stability of the whole financial market.
Securities and other investment products may not be offered for sale to the public in Germany without a prospectus; and the publication of any such prospectus requires the prior permission of BaFin.
Article 144 of the Capital Requirements Directive (2006/48/EC) stipulates that all EU member states must publish information on national implementation of Basel II. To mark the transposition of Basel II into German law. The Deutsche Bundesbank and BaFin have published a joint website. The structural specifications for this were drawn up by the Committee of European Banking Supervisors (CEBS) and have been adopted uniformly by all national supervisory authorities.
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