Financial Services SpeedRead - Germany: 18 March 2024 edition
18 March 2024
Welcome to the first edition of the Germany specific Financial Services SpeedRead, a collection of bite-sized updates designed to help you keep on top of key regulatory developments in financial services over the preceding fortnight. Please get in touch if you want to explore any of the topics covered in this fortnight's edition of Financial Services SpeedRead in more detail.
On 27 February 2024, the German Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) updated its FAQ on investment prospectuses (Prospekte für Vermögensanlagen).
The FAQ contains 24 questions and answers. These concern in particular, the content and form of investment prospectuses, the procedure of their approval, the details on their publication and on their ex-post adjustments, and the advertisement of investments.
On 20 February 2024, the Council of the EU published a press release confirming that it has adopted the proposed Directive amending MiFID II and the proposed Regulation amending MiFIR.
The amendments to the EU's trading rules are intended to equip investors with better access to the market data necessary for investing in financial instruments more easily and to increase the global competitiveness of the EU's capital markets and ensure a level playing field.
In particular, the amendments establish:
The texts will now be published in the EU’s Official Journal and enter into force 20 days later. The regulation will apply immediately in all EU member states, and member states will have 18 months to incorporate the directive into their national law.
On 19 February 2024, the European Central Bank (ECB) published its revised guide to internal models for credit risk, market risk and counterparty credit risk.
The guide follows the EBC's public consultation on internal models ending in September 2023. Alongside the updated guide, the ECB published a feedback statement in which it sets out comments received on the public consultation and the ECB's responses.
In particular, the revisions to the guide include:
The guide aims to provide transparency for relevant institutions on how the ECB understands and intends to apply the rules around internal models when assessing whether institutions meet the relevant requirements.
On 19 February 2024, the ECB published a memorandum of cooperation (Memorandum) entered into with Member State NCAs for the performance of their supervisory tasks in relation to the supervision of third-country groups and third-country branches. Under CRD IV, NCAs supervising branches of credit institutions with their head office in a third country and NCAs supervising institutions that are part of the same third-country group are required to cooperate closely to ensure that all activities of the third-country group in the EU are subject to comprehensive supervision.
The Memorandum aims to:
The memorandum was signed on 19 January 2024 and came into effect the following day.
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On 28 February 2024, the German Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) published its revised circular 05/2018 on minimum requirements for the compliance function and the further conduct, organisation and transparency obligations (Mindestanforderungen an die Compliance-Funktion und weitere Verhaltens-, Organisations- und Transparenzpflichten, MaComp).
The revisions to the MaComp followed the European Securities and Markets Authority's (ESMA) Guidelines on certain aspects of the MiFID II remuneration requirements (ESMA35-43-3565), which have been incorporated into module BT 8 of the MaComp.
In particular, the revisions to the MaComp include:
The revised MaComp is targeted to comply with ESMA's expectation by enhancing the value of existing standards and strengthening investor protection.
On 26 February 2024, the Council of the EU published a press release announcing that it and the European Parliament have agreed that the new Anti-Money Laundering Authority (AMLA) will be based in Frankfurt, beginning operations from July 2025. The location of AMLA's seat will be included in the regulation establishing the AMLA (AMLA Regulation).
AMLA will have direct and indirect supervisory powers over obliged entities and power to impose sanctions and other measures. This is part of a wider package of laws to reform the EU's framework against money-laundering and terrorist financing.
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The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
Readers should take legal advice before applying it to specific issues or transactions.