BaFin

Topic BaFin Articles of Association of the Federal Financial Supervisory Authority

Date: 01.05.2002, updated on 05.03.2013

(Satzung der Bundesanstalt für Finanzdienstleistungsaufsicht)

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Part I
Structure and management

Section 1
Name, structure and organisation of the Supervisory Authority


(1) The Federal Authority's full name is “Bundesanstalt für Finanzdienstleistungsaufsicht” (Federal Financial Supervisory Authority) (Supervisory Authority). The abbreviation “BaFin” may also be used in business relations.

(2) Four directorates are established to perform the Supervisory Authority’s statutory functions, namely Regulatory Services/Human Resources, Banking Supervision, Insurance Supervision and Securities Supervision. The directorates consist of departments and sections; the latter may be comprised into groups. In addition, units carrying out cross-sectoral duties may be set up that report directly to the President. The resultant organisational structure is laid down by the Executive Board of the Supervisory Authority with the approval of the Federal Ministry of Finance (Federal Ministry).


Section 2
Rights and duties of the bodies of the Supervisory Authority

(1) The Executive Board has overall responsibility for managing the Supervisory Authority, without prejudice to the Federal Ministry’s right to issue instructions.

(2) The President represents the Supervisory Authority before the courts and out of court. The President’s permanent deputy is a Chief Executive Director, acting as Deputy President. The Deputy President is appointed by the Federal Ministry based on a proposal brought forward by the President.

(3) Pursuant to section 6 (1) sentence 3 and subsection (2) sentence 5 of the Act Establishing the Federal Financial Supervisory Authority (Finanzdienstleistungsaufsichtsgesetz – FinDAG) the Executive Board unanimously adopts an organisational statute and rules of procedure, which require the approval of the Federal Ministry, as do amendments thereto. The Administrative Council is to be heard if provisions are adopted in the rules of procedure relating to the specific directorates which lead to additional cost burdens on one of the sectors of the financial services industry, namely banking, insurance or securities trading.

(4) The Executive Board regularly issues Publications of the Supervisory Authority.

Part II
Administrative Council


Section 3
Appointment and dismissal of members of the Administrative Council


(1) Only those persons in possession of the necessary expert knowledge required to perform the relevant duties shall become members of the Administrative Council. The members are appointed and dismissed by the Federal Ministry pursuant to section 7 of the FinDAG. The associations of the banking and insurance industries cited in subsection (6) and of the asset management companies (Kapitalanlagegesellschaften) shall be heard prior to the appointment of the members pursuant to section 7 (3) sentence 1 no. 2 (f) of the FinDAG. The Chairman of the Administrative Council and his/her Deputy are appointed for a term of five years. The other members and their deputies are appointed for a period of four years, unless otherwise specified in section 7 (6) of the FinDAG; reappointment is possible in both cases. Appointments and dismissals shall be notified in the Publications of the Supervisory Authority.

(2) Any proposal put to the Federal Ministry shall be accompanied by a curriculum vitae of the proposed member. Simultaneous membership or a deputy function in an authorised representative body of one of the supervised companies as well as membership in a supervisory board or another administrative board of any commercial company must be disclosed to the Chairman of the Administrative Council on appointment. Members with functions as defined under sentence 2 shall not be reappointed.

(3) Membership in the Administrative Council lapses if the member waives his/her membership by written declaration to the Federal Government or if the Federal Ministry establishes vis-à-vis the Administrative Council that the prerequisites of the appointment of the member are no longer fulfilled. Dismissal on exceptional grounds shall occur if the Federal Ministry establishes after hearing the Administrative Council that cogent grounds exist in the person of a member that justify the member’s dismissal. In particular, such cogent grounds include those that would bar public officials from performing their duties (section 66 of the Federal Civil Service Act (Bundesbeamtengesetz)) or which would justify suspension from public office (section 38 of the Federal Disciplinary Act (Bundesdisziplinargesetz)), or a breach of the obligation of confidentiality specified in section 11 of the FinDAG. The member shall first be given an opportunity to state his/her position.

(4) A deputy shall be nominated, and appointed by the Federal Ministry, for each member of the Administrative Council pursuant to section 7 (3) sentence 1 no. 2 (a) to (e) of the FinDAG. The Deputy Chairman deputises for the Chairman of the Administrative Council; if both the Chairman and the Deputy are unable to perform their duties, then another member of the Administrative Council from the Federal Ministry shall take the chair; in this case, depending on the number of seats held by the Federal Ministry additional representatives of the Federal Ministry shall act as Deputy Administrative Council members. If a member of the Administrative Council leaves before the end of the period for which he/she has been appointed, then a replacement member shall be appointed without undue delay by the Federal Ministry. The same shall apply to deputy members.

(5) The members of the Administrative Council serve in an honorary capacity. They shall be reimbursed for travel expenses in accordance with the regulations of the Federal Travel Expenses Act (Bundesreisekostengesetz). A daily allowance shall not be granted.

(6) Prior to the appointment of the persons specified in section 7 (3) sentence 1 no. 2 (f) of the FinDAG, the following associations shall be heard and each have a right to nominate one person by name:

  1. the German Banking Industry Committee (Deutsche Kreditwirtschaft);
  2. the German Insurance Association (Gesamtverband der Deutschen Versicherungswirtschaft e.V.); and
  3. the German Investment Funds Association (Bundesverband Investment und Asset Management e.V.).

The right to be heard and the right of nomination apply as long as the statutory distribution of seats in the Administrative Council remains unchanged.

Section 4
Powers of the Administrative Council

(1) The Administrative Council monitors and assists the Management of the Supervisory Authority. Its duties comprise in particular:

  1. the adoption of the budget (section 12 (2) of the FinDAG) presented by the Executive Board;
  2. the approval of the annual accounts and discharge of the Executive Board in accordance with section 12 (3) and (5) of the FinDAG, taking into account the auditor’s report and any findings of the Federal Court of Audit (Bundesrechnungshof) of which the Administrative Council has gained knowledge;
  3. the hearing prior to mandating the auditor for the Supervisory Authority;
  4. the issuing of the rules of procedure of the Administrative Council (section 7 (2) of the FinDAG);
  5. the establishment of agreement on amendments to the Articles of Association of the Supervisory Authority (section 5 (3) of the FinDAG);
  6. the hearing of formal agreements relating to cooperation between the Supervisory Authority and other institutions; agreements relating to cooperation and the exchange of information with other supervisory authorities shall remain unaffected.
  7. (Repealed)

(2) In order for the Administrative Council to be able to perform its duties, the President shall inform it by way of regular reports of the management activities of the Supervisory Authority; the other members of the Executive Board shall inform it of their directorates’ activities. In this regard, the Administrative Council has a right to be informed and to be heard by every member of the Executive Board.

(3) The Administrative Council may demand a report on the affairs of the Supervisory Authority at any time from every member of the Executive Board. An individual member of the Administrative Council may also demand a report to the Administrative Council. If a member of the Executive Board refuses to report in this case, then the report can only be demanded if two other members of the Administrative Council support the demand.

Section 5
Representation of the Administrative Council

The Administrative Council is represented by the Chairman and, if he/she is unable to perform his/her duties, by his/her Deputy. Moreover, representation is only possible by the deputy appointed under section 3 (4) sentence 2.

Section 6
Meetings of the Administrative Council


(1) The Administrative Council shall meet as the need arises, but at least once a year. The meetings are not public.

(2) The meetings of the Administrative Council are convened by the Chairman or, if he/she is unable to perform his/her duties, by his/her Deputy. The Administrative Council is to be convened on application by the Federal Ministry, the Executive Board or at least three members of the Administrative Council.

(3) The President and the Chief Executive Directors shall on principle take part in the meeting of the Administrative Council. In the event that they are not able to attend the meeting, the President shall be represented by a Chief Executive Director acting as Deputy President and the Chief Executive Directors shall be represented by a head of a department of their directorate. Without prejudice to the provisions of sentence 5, the Chairman of the Staff Council or, if he/she is unable to attend, his/her deputy as well as a representative of the Deutsche Bundesbank have the right to attend the meetings. The Chairman may invite other employees of the Supervisory Authority, external experts and other persons providing information if their attendance is appropriate. The attendance of employees of the Supervisory Authority and third parties may be barred for individual items on the agenda.

(4) The Administrative Council has a quorum if at least half its members are present, including at least one member of the Bundestag and at least one of the persons listed in section 7 (3) sentence 1 no. 2 (f) of the FinDAG. The Administrative Council’s resolutions require a simple majority of the votes cast. In case of a tie, the Chairman or his/her Deputy shall have the casting vote. The details shall be governed by the rules of procedure. The rules of procedure shall in particular contain provisions relating to the convening of the Administrative Council, deliberations and the final adoption of resolutions.

(5) A member shall not have a right to vote if the resolution to be taken directly concerns the interests of a company to which the respective member maintains a legal relationship of the nature set out in section 3 (2) sentence 2. In case of doubt, the Administrative Council shall, in the absence of the respective member, confer and decide whether this is the case.

(6) Minutes shall be prepared on the results of the meetings and the course of the deliberations and shall be signed by the Chairman or his/her Deputy. The details shall be governed by the rules of procedure.

(7) In the case of section 4 (1) sentence 2 no. 1, the Administrative Council shall adopt a resolution within a period of two months after presentation. If no resolution is adopted within this period, then the budget presented by the Executive Board shall be deemed to have been adopted.

Section 7
Procedure

The Administrative Council may adopt resolutions in writing or by way of telecommunications. The details shall be governed by the rules of procedure.

Section 8
Advisory Board

(1) The Advisory Board shall elect a Chairman from among its members and establish rules of procedure for the conduct of its meetings. The Advisory Board shall be convened as the need arises, at least once a year, by the Chairman or, if he/she is unable to do so, by his/her deputy; to the extent that both are unable to perform their duties or have not yet been elected, the Advisory Board shall be convened by the Executive Board. The Advisory Board shall be convened on application by the Federal Ministryor the Executive Board. It shall also be convened on application by one quarter of its members. Each member of the Advisory Board has the right to submit proposals for deliberation. These are to be notified to themembers of the Advisory Board prior to any decision as to the contents of the agenda and shall be deliberated if supported by four Advisory Board members. The President, the Chief Executive Directors and a representative of the Federal Ministry participate in the meetings of the Advisory Board. In the event that the President and the Chief Executive Directors are unable to attend, section 6 (3) sentence 2 applies mutatis mutandis. The meetings are not public. The Chairman of the Advisory Board may invite external advisers to attend the meetings.

(2) The members shall be appointed by the Federal Ministry for a term of five years; they may be reappointed. The regulations of section 3 (3), subsection (4) sentence 4 and subsection (5) apply mutatis mutandis to the members of the Advisory Board. In the case that members are not able to attend, members may appoint deputies taking into account the right of nomination under subsection (4). The Federal Ministry and the Chairman of the Advisory Board are to be informed of this prior to the meeting.

(3) The President or, if he/she is unable to perform his/her duties, his/her deputy shall pledge the Advisory Board members and their deputies as well as external advisers to perform their duties conscientiously and to preserve confidentiality. This pledge shall be recorded in writing. On reappointment reference to the previous pledge shall suffice.

(4) For the appointment of the members from the groups of companies specified in section 8 (2) sentence 3 of the FinDAG, the following associations have a right of nomination by name:

  1. the Association of German Banks (Bundesverband deutscher Banken e.V.) for one representative from the banking industry;
  2. the German Savings Banks Association (Deutscher Sparkassen- und Giroverband e.V.) for one representative from the banking industry;
  3. the Association of German Cooperative Banks (Bundesverband der Volks- und Raiffeisenbanken e.V.) for one representative from the banking industry;
  4. the Association of Foreign Banks in Germany (Verband der Auslandsbanken e.V.) for one representative of the banking industry;
  5. the Association of German Public Sector Banks (Bundesverband Öffentlicher Banken Deutschlands e.V.) for one representative of the banking industry;
  6. the Association of German Pfandbrief Banks (Verband deutscher Pfandbriefbanken e.V.) in consultation with the Association of Private Building Societies (Verband der Privaten Bausparkassen e.V.) and the Federal Office of State Building Societies (Bundesgeschäftsstelle der Landesbausparkassen) for one representative of the banking industry;
  7. the German Investment Funds Association (Bundesverband Investment und Asset Management e.V.) for one representative of the asset management companies and the financial services institutions;
  8. the German Insurance Association (Gesamtverband der Versicherungswirtschaft e.V.) for four representative of the insurance industry;
  9. the Association of Private Health Insurance Companies (Verband der privaten Krankenversicherung e.V.) for one representative;
  10. the Association of Company Pension Funds (Arbeitsgemeinschaft für betriebliche Altersversorgung e.V.) for one representative.

In addition, the Advisory Board shall comprise three members from academia, in particular from the banking management and insurance business management fields, as well as scientific associations, three representatives of consumer protection organisations, one representative of the Deutsche Bundesbank and one representative each from the independent professions, the associations of small and medium-sized companies, the trade unions and one representative of industry. A simultaneous membership in other boards of the Supervisory Authority is possible.

(5) The President of the Supervisory Authority shall inform the Advisory Board by way of regular reports, at least once a year, about current supervisory issues.

(6) On application by the Executive Board, the Federal Ministry of Finance or at least one quarter of its members, the Advisory Board may make recommendations on specialist matters to the Supervisory Authority. This shall require that more than half of the members of the Advisory Board support such recommendation. In deliberations about aspects of cooperation between the Supervisory Authority and the Deutsche Bundesbank the representative of the Deutsche Bundesbank shall not have a voting right.

(7) Minutes shall be prepared on the results of the meeting and the course of the deliberations and shall be signed by the Chairman or his/her Deputy. The details are governed by the rules of procedure.

Section 8a
Consumer Advisory Council

(1) The Federal Ministry shall appoint the following members of the Consumer Advisory Council:

  1. three representatives from academia who engage to a significant extent in research in the field of consumer or investor protection;
  2. four representatives from consumer and investor protection organisations;
  3. three representatives from out-of-court dispute resolution entities;
  4. one representative from the Federal Ministry of Food, Agriculture and Consumer Protection (Bundesministerium für Ernährung, Landwirtschaft und Verbraucherschutz – BMELV); and
  5. one representative from trade unions.

A simultaneous membership in other boards of the Supervisory Authority is possible.

(2) The President of the Supervisory Authority shall inform the Consumer Advisory Council by way of regular reports, at least once a year, about current consumer and investor protection matters related to financial services.

(3) On application by the Executive Board, the Federal Ministry or at least one quarter of its members, the Consumer Advisory Council may make recommendations on consumer or investor protection matters to the Supervisory Authority. This shall require that more than half of the members of the Consumer Advisory Council support such recommendation.

(4) The provisions of section 8 (1) to (3) and (7) shall apply mutatis mutandis.

Part III
Budgetary management


Section 9
Budget

(1) The budget shall be prepared pursuant to the principles of sections 105 to 112 of the
Federal Budget Code (Bundeshaushaltsordnung).

(2) The Executive Board shall submit the following to the Administrative Council:

  1. as of 31 March each year, supporting documents for the funds actually utilised in the past financial year;
  2. as of 1 September each year at the latest, the draft budget for the following financial year.

Each of these deadlines may be prolonged on application by the Executive Board by up to one month. The Federal Ministry shall determine, subject to statutory requirements, the time when the budget shall be prepared and presented.

(3) Measures of material or substantial financial importance as well as entering into liabilities for which the budget contains no authorisation require the approval of the Administrative Council.

(4) (Repealed)

Section 10
Budgetary management

(1) The financial year of the Supervisory Authority corresponds to the calendar year.

(2) Budgetary management and the rendering of accounts are subject to the regulations of the Federal Budget Code (Bundeshaushaltsordnung). The books shall be established and kept in compliance with the principles of the Federal Budget Code. Payments in the administrative sector shall be made via the bank account of the Supervisory Authority. Within three months of the end of the financial year the Executive Board shall prepare annual accounts of actual revenues and expenditure in compliance with the federal provisions governing the rendering of accounts, which shall be presented to the Administrative Council.

(3) The annual accounts are to be audited, without prejudice to the audit carried out by the Federal Court of Audit under section 111 of the Federal Budget Code, by an auditor, whereby a different auditor is to be mandated by invitation to tender by the Executive Board in consultation with the Federal Ministry at least every four years; the Federal Ministry shall act in agreement with the Federal Court of Audit. Auditors may be public accountants or accountancy firms. The Executive Board shall present the annual accounts and the auditor’s report to the Federal Court of Audit. The Federal Court of Audit informs the Administrative Council on any findings that are of relevance to the decision on the discharge of the Executive Board.

Part IV
Transfer of rights and duties, publication

Section 11
Transfer of rights and duties

The administrative agreements entered into by the Federal Ministry with the Federal Banking and Insurance Supervisory Offices, in particular relating to property management, the IT Service Center and the exchange of staff, shall be transferred to the Supervisory Authority with the same rights and duties unless specified otherwise. The Administrative Council shall be informed of these administrative agreements.


Section 12
Publication of the Articles of Association

The Articles of Association and any amendments thereto shall be published in the Publications of the Supervisory Authority.

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Please note:Ger­man ver­sion is bind­ing

This translation is furnished for information purposes only and may refer to an older version of the text. The original German text is binding in all respects.

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