Title: New Regulations Shaping Germany’s Banking Landscape: Compliance Requirements

Germany’s Banking Sector and Regulatory Framework

• Germany is home to over 2,000 financial institutions.
• A leading player in the global banking sector with a significant contribution to the economy.
• Two-tier regulatory framework: licensing system and operational requirements.

Regulatory Framework Components

Licensing System

• Ensures reputable institutions access the market.
• Activities requiring a license: accepting deposits, granting loans, investment advice, high-frequency trading, etc.

Operational Requirements

• Minimum capital and liquidity standards.
• Risk management practices.
• General conduct of business.

European Union (EU) Regulations

• Germany complies with CRD IV and MiFID II.
• Licensing and operational requirements apply to foreign entities.

Obtaining a License

• Foreign entities must register a German subsidiary or branch.
• Meet the required capital and maintain a qualified manager.
• Managers and supervisory board members must be trustworthy and skilled.

Regulations for Branches and Cross-Border Activities

• Foreign banks conducting regulated business require a license or EU passport.
• BaFin specifies certain activities may not require a license.

Possible Changes to the Regulatory Landscape

• European Commission proposing a mandatory licensing requirement for EU branches of non-EU institutions.

Conclusion

• Maintaining regulatory compliance essential for a strong business reputation and customer trust.
• Banks and financial services providers must stay informed of the latest regulatory developments.