Cross‐border services into Germany
| Published date | 01 March 2003 |
| Date | 01 March 2003 |
| DOI | https://doi.org/10.1108/13581980310810372 |
| Pages | 21-25 |
| Author | Andreas Steck,Kristian Landegren |
| Subject Matter | Accounting & finance |
Cross-border services into Germany
Andreas Steck and Kristian Landegren
Received (in revised form): 14th October, 2002
Linklaters Oppenhoff & Ra
¨dler, Mainzer Landstraße 16, Frankfurt am Main, D-60325, Germany;
tel: +49 697 1003 185; fax: +49 697 1003 333; e-mail: andreas.steck@linklaters.com
Andreas Steck is a lawyer in the Global
Finance department of Linklaters Oppenh-
off & Ra¨dler in Frankfurt am Main. He spe-
cialises in banking supervisory law,
investment funds law and insurance super-
visory law.
Kristian Landegren is a lawyer in the
Global Finance department of Linklaters
Oppenhoff & Ra¨dler in Frankfurt am Main.
ABSTRACT
The German Banking Act (the Act) sets out
the licensing requirements for the provision of
cross-border financial services into Germany.
The licensing requirements under the Act incor-
porate the old licensing regime as well as subse-
quent EU regulations. The licensing
requirements for non-European Economic Asso-
ciation (EEA) credit institutions were not suffi-
ciently addressed in the Act. Consequently,
controversy surrounds the lawfulness of cross-
border financial services by non-EEA institu-
tions in Germany. While, however, the
German Financial Supervisory Authority
(Bundesanstalt fu
¨r Finanzdienstleistungsauf-
sicht, the BAFin) followed a liberal licensing
policy, this dispute was mainly academic. In
April, 2002, the BAFin published a letter
expressing its intention of changing this liberal
policy. Market participants voiced concerns at
the proposed changes to the BAFin policy. This
paper describes the statutory background of the
licensing requirements and discusses the possible
consequences for the market of the policy change.
INTRODUCTION
This paper focuses on the licensing require-
ments for the provision of banking and
financial services in Germany, particularly
the requirements for the provision of cross-
border financial services into Germany.
With the globalisation of the financial
industry the ability to provide cross-border
financial services has become increasingly
significant and the need for a physical pre-
sence in target markets has been reduced.
In May, 2002, the BAFin published a letter
on the Internet (the BAFin letter), which
heralded a change in its licensing policy for
cross-border banking and financial services
business in Germany.
The first part of this paper outlines the
statutory framework surrounding foreign
credit and financial service institutions in
Germany and the licensing policy of the
BAFin, the successor regulator to the Bun-
desaufsichtsamt fu
¨r das Kreditwesen (the
BAKred, prior to the publication of the
BAFin letter. The second part of this paper
discusses the details of the BAFin letter,
and the third part considers the implica-
tions of the BAFin letter and its impact on
cross-border services.
STATUTORY FRAMEWORK
The statutory framework which regulates
the issuing of a license to non-German
companies that wish to provide financial
services directly or indirectly in Germany
(a Licence) is set out in ss. 32 and 53–53d
Page 21
Journal of Financial Regulation and Compliance Volume 11 Number 1
Journal of Financial Regulation
and Compliance, Vol. 11, No. 1,
2003, pp. 21–25
#Henry Stewart Publications,
1358–1988
To continue reading
Request your trial