An authorization of the German Federal Financial Supervisory Authority (“BaFin”) is required to provide commercial banking or financial services in Germany. It is not always necessary, though, to establish a company in Germany and to submit to an elaborate licensing procedure with the German supervisory authorities. Under certain circumstances, banks and financial service providers may use their authorization issued by a European Economic Area (EEA) Member State to offer their services in Germany as well. Separate licensing in Germany is not necessarily required for corporate holders of a European passport if a branch is established or cross-border services are offered. The European passport allows companies to use their EEA license to access the German financial market.
The Second Council Directive on Banking of December 15, 1989 represented a key turning point in intra-European banking supervision. Since it has been transposed, the banks’ home member state plays a key role in supervision. The supervisory authorities of the host member state, BaFin and the German Central Bank in Germany, have only limited competencies. In a first step, the EEA company must notify its homeland supervisory authority that it intends to provide banking or financial services in Germany. The relevant supervisory authority will then contact BaFin to inform it about the planned business activity in Germany. In such cases, supervision is largely performed by the homeland supervisory authority.
While EEA institutions may conduct business in Germany without BaFin authorization, compliance with other pertinent German laws will obviously be required. Among others, corporate EU passport holders need to observe the provisions of the German Money Laundering Act and large portions of the German Securities Trading Act in order to offer legally compliant contracts. It is an absolute necessity to obtain extensive legal advice from a specialized law firm when entering the German market.
We advise and support EEA banks and financial service providers, whether cross-border services are offered or a branch is established on the German market. Our attorneys specializing in banking law and capital markets law advise comprehensively and ensure that the German market is entered in a legally compliant manner. We advise on all aspects of the European banking passport.
Attorney Dr. Annette Wagemann (Certified Specialist for Banking and Capital Markets Law) and Attorney Sebastian Förste are looking forward to addressing your questions regarding financial regulation in Germany and the European Passport. You can contact them via e-mail (firstname.lastname@example.org) or by phone (+49 (0)69 76 75 77 80).