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Apply for permission for financial service provider

Service Description

The Federal Financial Supervisory Authority (BaFin) may grant permission subject to conditions. In addition, the permit can be limited to individual financial services and entails ongoing supervision of the financial services provider by the authority.

Permission is required for the following financial services:

  • the investment brokerage,
  • the provision of investment advice,
  • the operation of a multilateral trading facility,
  • the placement business,
  • the operation of an organized trading system
  • contract brokering,
  • financial portfolio management
  • proprietary trading,
  • the intermediation of deposits in third countries,
  • the crypto custody business,
  • the foreign notes and coins business
  • factoring
  • finance leasing,
  • investment management and
  • restricted custody business.

You also need written permission from BaFin if you want to

  • want to conduct proprietary business in addition to banking business or financial services, i.e. want to buy or sell financial instruments for your own account.

Note: All securities trading companies are obliged to secure their liabilities from securities transactions by belonging to the Compensatory Fund of Securities Trading Companies (EdW). The amount of the contribution depends on the scope of the business activity.

For other financial services, a permit may be required in accordance with the Trade Regulation Act (Gewerbeordnung). Please check which permit is required for your trade before submitting your application.

Process flow

You must apply for permission in writing:

  • The forms from the Implementing Regulation (EU) 2017/1945 must be used for a permit to provide the facts § 1 para. 1 sentence 2 no. 4, 10 para. 1a sentence 2 no. 1 to 4 or 11 KWG. Complete the following forms:

    • Form for the application for authorization as an investment firm
    • If applicable: list of members of the management body
    • If applicable: notification of changes in the members of the management body.

  • Otherwise, you may submit the application informally.

  • Please send the application and the required documents in triplicate to BaFin.

  • BaFin will review your application.

  • You will then receive notification of BaFin's decision by mail.

Requirements

  • Evidence of sufficient initial capital
    • Measured according to paid-in capital and reserves
    • depending on the type of financial services EUR 25,000 to 50,000
    • Alternatively: an appropriate insurance policy (sum insured depends on the type of financial services)
  • Financial services institutions providing only third country deposit broking, foreign exchange business, factoring or financial leasing: no reserves
  • Financial portfolio manager: own funds equal to at least one quarter of the costs included in general administrative expenses, amortization and depreciation of intangible assets and depreciation of tangible assets in the profit and loss account of the most recent annual financial statements.
  • Sole trader or trading partnership: risk assets of the owner or general partners are included in the assessment of the institution's solvency
  • Evidence of the professional and personal suitability of management

Which documents are required?

  • founding documents, memorandum or articles of association (certified copies)
  • appropriate proof of funds required for business operations
  • information on the managers of the company
  • information necessary for the assessment of the reliability of the applicants and the managers in the form of a declaration of no criminal liability (forms and online services)
  • Information required for the assessment of the professional qualification of the owners and managers:
    • detailed, complete, signed curriculum vitae of each owner or manager,
    • supplemented at least by the certificates of employment terminated in the last 3 years
  • A viable business plan indicating the type of business envisaged.
    • with justified indication of their future development
    • including budgeted balance sheets, budgeted profit and loss accounts for the first three financial years
  • a more detailed description of the intended business development
  • if drafted: Sample of the envisaged
    • customer contracts,
    • management contracts,
    • account or deposit authorizations, and
    • general terms and conditions
  • Representation of the organizational structure of the Institute, including an organizational chart.
    • with information on planned branch offices and
    • whether the cross-border provision of financial services is intended, and
    • a statement as to whether it is intended to outsource any functions to another entity
  • A description of the planned internal control procedures, including an explanation of how compliance with the obligations under the German Banking Act and the German Securities Trading Act will be ensured
  • If significant shareholdings are held in the institute:
    • Information on the owners of significant shareholdings
    • Indication of the amount of such shareholdings
    • Information necessary for assessing the reliability of the owners or legal representatives or personally liable partners (see above: declaration of exemption from criminal liability, sample declaration of BaFin)
  • If applicants or owners of significant shareholdings belong to corporate groups: Presentation of the group structure, consolidated financial statements
  • Statement of facts indicating a close connection between the financial services institution and other natural persons or other companies
  • Notifications and documents pursuant to Section 2c of the German Banking Act (Kreditwesengesetz) in conjunction with the Ownership Control Ordinance (Inhaberkontrollverordnung)
  • in the case of securities trading companies in the legal form of a sole proprietorship: a statement by the proprietor as to the extent to which he has taken appropriate precautions to protect customers in the event of the cessation of his business activities, for example in the event of death or incapacity. The presentation includes the consent of the representative named therein and the representative's statement assessing his reliability (see above: declaration of non-criminal liability, BaFin model declaration), provided the representative is a natural person.

In the case of financial services institutions applying for a license pursuant to Section 1 (1a) sentence 2 nos. 1- 4 or 11, (1) sentence 2 no. 4 or no. 10 of the German Banking Act:

  • Information according to Delegated Regulation (EU) 2017/1943.
  • Form of the Implementing Regulation (EU) 2017/1945

What are the fees?

  • Costs of proceedings: EUR 4,545 to EUR 10,160
  • In addition, you as an institution must reimburse the costs of the Federal Financial Supervisory Authority for ongoing supervision. Here, costs for audits initiated by BaFin and certain individual measures are charged separately (separate reimbursement, fees). Otherwise, the costs are allocated proportionately to the individual institutions.

What deadlines do I have to pay attention to?

Application for permission: before starting business activity

Processing duration

6 months from complete application

Legal basis

Appeal

Forms: partly available for download

Online procedure possible: no

Written form required: yes

Personal appearance required: no

Author

The text was automatically translated based on the German content.

Technically approved by

Federal Ministry of Finance

Professionally released on

03.02.2020

Source: Zuständigkeitsfinder Thüringen (Linie6PLus)

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