Typically an administrative offence exists when a necessary reporting pursuant to the Foreign Trade and Payments Regulation (AWV) was conducted incorrectly, incompletely, not at all, or not in time.
According to the changed rules within the Foreign Trade and Payments Act (AWG), the prosecution of that administrative offence will be ceased if it is a negligent breach of law, the breach was revealed by way of self-monitoring and the responsible authority was notified. Moreover, it is necessary that adequate measures are taken to prevent a repeat failure for the same reason. Pursuant to Sect. 22 para. 4 clause 2 Foreign Trade and Payments Act a notification to the responsible authority will only be regarded as voluntary if the respective authority has not started any investigations, yet.
Due to the very positive role of development banks in regard to the cyclical stabilization and the economic growth stimulus, we see the progression to a development bank 2.0 not only in Germany, but in an international environment.
This leads to an international momentum to take the positive aspects of development banks and establish them in their own countries. The aspects of the development bank 2.0 concern the independence of the bank regarding influence from politics. We observe an increase in freedom and a change from narrow political provisions to a leadership through goals, especially in the area of foreign bank foundation:
Across industries, recent years have revealed that an efficient allocation of liquidity is essential for businesses’ economic success. By leveraging European Central Bank’s (ECB) standing facilities newly formed banks can professionalize their liquidity management, too. But, in order to utilize these facilities specific requirements have to be met.
To guarantee a successful liquidity management adequate measures have to be taken to cope with excess liquidity and liquidity demand. ECB’s standing facilities are one possible instrument to manage short-term and flexible liquidity mitigation measures. Besides marginal lending facilities standing facilities provide deposit facilities. The marginal lending facilities provide short-term “overnight”-lending to banks whereas deposit facilities offer a risk-free deposit account for excess liquidity.
There is currently an ongoing discussion about the criteria of demarcation between closed and open ended funds between the European Commission and the European Securities and Markets Authority (ESMA). The determination of these criteria is relevant not only with regard to compliance obligations of the asset management companies – in particular with respect to rules related to liquidity management-, but also with regard to the application of the transitional provisions of the KAGB.
In the future, in the course of the banking licensing procedure according to KWG (German Banking Act) it has to be proven that the prospective managers of the institution are able to commit sufficient time to perform their functions. The license application has to include information according to which BaFin (German Federal Financial Supervisory Authority) can assess whether the managers are able to commit sufficient time to perform their functions. Especially the number of further directorships of the manager has to be given, as well as the expenditure of time which has to be donated to them. This has to be set into proportion to the time required for his management function in the new established institution.
The German Automotive Market shows a downturn for the first six months of this year again, just as the European market as a whole does. The reasons are multilayered.
OEMs reinforced their activities by using a combination of offering car sales, after-sales services, mobility services and financial service out of one hand (one stop shop) to break this trend. This has been supported by OEM owned/captive financial services organizations. These banks offer traditional finance products like loans and leasing as well as insurance services.
One of the major questions on captive finance agenda is the issue of re-financing. An attractive option here is to use account deposits held by customers.
OEM owned banks can offer several products, like fixed-term deposits, restricted cash or savings deposits. With these products they increase customer loyalty and improve their own re-financing structure.
What chances and threats arise and what themes are currently to be considered are some of the key topics for our PwC Team. Don’t hesitate to contact us.
The Ministers of Finance of Germany and Switzerland signed an agreement on the 16th of August 2013 that provides concessions for mutual market access for financial institutions.
Especially, Swiss Banks will benefit from the new regulation. They are allowed to acquire German clients from Switzerland without having a branch in Germany. Furthermore, the duty of initiating customer relationships through a local institution will be repealed. Facilitation for the sale of Swiss funds in Germany will also be provided. The agreement is expected to apply starting in 2014.
The first license applications of Alternative Investment Fund Managers (AIFM) under the new Capital Investment Code (Kapitalanlagegesetzbuch, KAGB) are on their way. Any form of regulatory license has its own challanges, even so the AIFM license. So far, the following special issues arose:
- Additional occupations: Some managing directors of AIFM are still engaged in the management of various property companies or SPVs
- Trustworthiness of managing directors: Since some of the property companies or SPVs had (also due to the financial crisis) to start insolvency proceedings, managing directors carrying sometimes the burden of having insolvency experience
Besides successfully undergoing a licensing procedure, designing an efficient business model is the most crucial step when establishing a bank. In order to increase cost-effectiveness, most banks source out services such as securities settlement, management of accounts or credit processing to external providers.
On account of this trend, the market for banking service providers has grown in the recent years. Both providers with a very strong focus on certain services as well as ones that offer the whole range of banking services are entering the market.
Changes regarding reporting obligations pursuant to the German Foreign Trade and Payments Regulation (AWV)
Within the scope of the establishment of credit or financial institutions external sector statistics reporting is still to be observed. This topic is subject to substantial changes from July 2013 on.
From this date on the reports could only be filed electronically. Apart from that, the content of the reporting will be extended in order to meet the increased needs for information on both, national and international level. Additionally, there will be changes with respect to the persons subject to external sector statistics reporting obligations.