Regulatory Alerts2016-11-18
Notice on the granting of authorisation to provide financial services pursuant to section 32 (1) of the German Banking Act
The Deutsche Bundesbank issued this notice clarifying that entities providing financial services in Germany commercially or on a scale requiring a commercially organized business undertaking must obtain written authorization from the Federal Financial Supervisory Authority (BaFin) under section 32 (1) of the German Banking Act. This authorization is mandatory before commencing business, can be subject to conditions or limitations by BaFin, and its absence constitutes a punishable offense leading to immediate cessation orders. The document comprehensively defines the specific financial services requiring authorization, such as investment broking, portfolio management, and proprietary trading, along with the relevant financial instruments as per section 1 (1a) and 1 (11) of the Banking Act.