Financial Services SpeedRead - Germany: 2 May 2024 edition

Welcome to the fourth 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.

Financial Markets 

1. BaFin: Announcement: BaFin applies five ESMA guidelines on CCPs and data transfer

On 2 April 2024, the German Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) announced that it applies the following guidelines of the European Securities and Markets Authority (ESMA):

• Guidelines on the types and content of the provisions of Cooperation Arrangements (Article 79 of the Central Counterparties Recovery and Resolution Regulation, CCPRRR) (ESMA91-372-1791);
• Guidelines on the summary of resolution plans (ESMA91-372-2345);
• Guidelines on written arrangements and procedures for the functioning of resolution colleges (ESMA91-372-1958);
• Guidelines on the assessment of resolvability (Article 15(5) of CCPRRR) (ESMA91-372-2346);
• Guidelines on the transfer of data between Trade Repositories under the European Market Infrastructure Regulation (EMIR) and the Securities Financing Transaction Regulation (SFTR) (ESMA74-362-2351).

With the four guidelines on resolution measures for central counterparties, ESMA aims to promote convergent supervisory and resolution practices within the European supervisory system. ESMA published these guidelines in February 2024. 

The amended Guidelines on the transfer of data between Trade Repositories under EMIR and SFTR were published in January 2024 and aim to remove portability obstacles of data from one trade repository to another.

Banking and Prudential

2.  EBA: Final Guidelines: Application of the group capital test for investment firm groups

On 11 April 2024, the EBA published its final guidelines on the application of the group capital test for investment firm groups (the Guidelines).

The Guidelines set out objective thresholds and criteria for competent authorities to consider for the purpose of assessing whether the conditions of the group capital test, as set out in Article 8 of Regulation (EU) 2019/2033 (IFD), have been met. The Guidelines aim to ensure the group capital test is applied consistently across the EU.

The Guidelines include (i) quantitative thresholds, such as the number of undertakings and levels within a group, and (ii) qualitative thresholds, including the need for simple capital ties and a clear ownership structure. The Guidelines also set out a methodology for NCAs to assess the adequacy of the own funds requirement of third-country undertakings of EU groups. 

The Guidelines will apply from 1 January 2025. 

Funds Management

No new entries.

Senior Managers and Governance

No new entries.

Financial Crime

No new entries.

Retail Services

No new entries.

Payments

No new entries.

Digital Services and Fintech

3.  ESAs: Announcement: Voluntary exercise for the collection of registers of information under DORA

On 11 April 2024, the European Supervisory Authorities (ESAs) announced that they will be launching a voluntary exercise for the collection of registers of information of the contractual arrangements financial entities have in place with ICT third-party service providers. This is a dry run for firms to prepare for the implementation and reporting of registers of information under the Digital Operational Resilience Act (DORA) from 17 January 2025.

The ESAs will provide individual support and feedback to financial entities taking part in the exercise to help them build their register of information, test the reporting process, address data quality issues and improve internal processes. 

The ESAs invite financial entities to an introductory workshop on the voluntary exercise on 30 April 2024. The voluntary exercise is then expected to be launched in May 2024, with financial entities expected to submit their registers of information to the ESAs through their competent authorities between 1 July and 30 August. 

4.  German Federal Ministry of Finance: Publication: Draft bill to transfer the German crypto-assets regulatory framework into MiCAR

On 5 April 2024, the German Federal Ministry of Finance (Bundesfinanzministerium, BMF) published a draft bill for three ordinances intended to facilitate the transition of the German crypto-assets regulatory framework to the Markets in Crypto-Assets Regulation (MiCAR). The draft bill includes:

• the ordinance on the implementation of the simplified procedure according to Article 143(6) MiCAR (MiCAR-TransitV);
• the ordinance on the submission of applications according to MiCAR (MiCAR-AntragsV);
• the ordinance on the delegation of the power to issue further technical ordinances to the German Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin).

The Act on the Digitalisation of the Financial Market (Finanzmarktdigitalisierungsgesetz, FinmadiG), which provides for a Crypto Markets Supervision Act (Kryptomärkteaufsichtsgesetz, KMAG), shall ensure the implementation of MiCAR. The MiCAR-TransitV and the MiCAR-AntragsV specify the provisions of the KMAG that are intended to enable existing companies and new market participants to provide their services throughout Europe from the very beginning of MiCAR's application.

For this purpose, the MiCAR-TransitV specifies the simplified procedure according to Article 143(6) MiCAR. The simplified procedure is applicable to entities already holding an authorisation to render activities regarding crypto-assets under German law (Section 50(1) KMAG). The authorisations granted in the simplified procedure will expire with the MiCAR-TransitV on 31 December 2025.

The MiCAR-AntragsV allows the submission of applications for the authorisation of crypto-asset service providers (CASPs) before 30 December 2024, the application date of MiCAR. The MiCAR-AntragsV will expire on the application date of MiCAR, allowing market participants a smooth transition.

The third ordinance enables BaFin to issue further technical ordinances, e.g. on the transfer of insider information or on the obligation of financial reporting.

ESG

No new entries.

Other

No new entries.