There is new activity within the project to update and amend the provisions of the Directive on Payment Services. On 5 May 2015, the Parliament and Council agreed on a new proposal for a revised version of the Directive on Payment Services following trilogue negotiations between the Commission, the European Parliament and the Council of Ministers.
Already in July 2013, the Commission had drafted a proposal for a “Directive of the European Parliament and of the Council on payment services in the internal market and amending Directives 2002/65/EC, 2013/36/EU and 2009/110/EC and repealing Directive 2007/64/EC” (so-called PSD2).
The implementation act changes the definition of deposits eligible for compensation, introduces new reporting requirements and extends information requirements.
The revised Deposit Guarantee Schemes Directive (Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014, DGS Directive) provides new and largely harmonized rules at EU level for deposit protection. It aims to protect as many deposits as possible in favor of comprehensive consumer protection and in the interest of financial stability. The provisions form one of the pillars of the European Bank Union and are connected closely to the regulations on bank recovery and resolution.
Bitcoins (BTC) are increasingly used as a virtual currency for purchases of goods and for the remuneration of works or services. There are other, similar currencies such as Litecoins and PPCoins. According to the daily newspaper Die Welt, Bitcoins are now accepted by more than 75,000 companies.
Bitcoins are created using a mathematical process. Anyone who has a powerful enough computer can access that process by logging into a peer-to-peer system. The individual participants (clients) create the currency by solving CPU-intensive cryptographic tasks (so-called mining). For mathematical reasons, the possible number of Bitcoins in circulation is limited to approximately 21 million units (Extract from the Annual Report 2013 of the Federal Financial Supervisory Authority – BaFin – regarding trading in Bitcoins, dated 17 June 2014).
Single aspects of future market access in Germany for investment firms from third countries according to MiFID II (Directive no. 2014/65 / EU) and MiFIR (Regulation (EU) No. 600/2014)
Part of the revision of MiFID was the intended uniform regulation of market access in the European Union (EU) for providers of investment services and activities from third countries.
On November 4, 2014, the Single Supervisory Mechanism (SSM) became effective. It entrusts the European Central Bank (ECB) with the final approval of a credit institutions licence application. Here some first impressions from one of the SSM licensing procedures currently on the way:
Theory and practice of an SSM licensing procedure
While the corresponding EU-provisions describe ECB’s involvement in an SSM licensing procedure as having 10 (20) working days for its final approval once the national application procedure came to a positive preliminary result, the practice is rather different. In reality, ECB will be involved in an SSM licensing procedure from the first day the applicant approaches the national competent authority (the national regulator). Thereafter, ECB and the national regulator will liaise closely. The national regulator will remain the first point of contact for the applicant in the daily operations of the licensing procedure. However, ECB will join the meetings with the applicant once the application is filed.
The Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, hereinafter BaFin) has granted a licence for running banking business in Germany to Kuveyt Türk Bank AG (hereinafter KT Bank), a German subsidiary of the Turkish bank Kuveyt Türk Katilim Bankasi A.S.. KT Bank will be the first credit institution in Germany, which will offer banking products according to Islamic jurisprudence (covered by Sharia) to retail-clients. Whether other banks will follow this example, remains to be seen.
Despite BaFin will not handle the application to run a credit institution according to the Sharia different than the application to run a non-religious credit institution, some regulatory specifics have to be considered when it comes to Islamic Banking.
With their establishment credit institutions will face further reporting duties. After the German Ministry for Finance (Bundesfinanzministerium für Finanzen) has amended the “Verordnung zur Einreichung von Finanz- und Risikotragfähigkeitsinformationen nach dem Kreditwesengesetz“ (Finanz- und Risikotragfähigkeitsinformationsverodnung = Finance and Risk Bearing Capacity Information Regulation – FinanzRisikoV) of December 6, 2013 (last amendment December 19, 2014), credit institutions in Germany will be obliged to file reports on their risk bearing capacity.
On February 25, 2015 the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) has enacted “Allgemeinverfügung zur Einreichung der Informationen zur Risikotragfähigkeit“ (GZ: BA 54 – FR 2204 – 2010 / 0004), which sets the reporting dates for risk bearing information reports of credit institutions, as follows:
Crowdfunding, which by now is not only practiced in the Anglo-Saxon area, will already be stronger regulated in this year. In the recent years a market has developed in Germany, which offers individuals businesses typical of banks (e.g. Deposit and Credit Business as well as Financial Services) without the necessity to have (direct) business proceedings with a bank. Through commercial it was intended to make individuals believe, that it is possible to invest without a bank in a project and to achieve big profit out of it. On closer examination, it becomes clear that in most of the cases it is neither a classic crowdfunding project nor “banking without a bank”, since all crowdfunding marketplaces in Germany cooperate with a regulated partner (credit institution, payment service institution, or financial services institution). Proper prospectus are rare as well as information on a project once the public offering is finished.
The European banking supervision has started. Since November 4, 2014 the Single Supervisory Mechanism (SSM) has begun its work. The SSM comprises the European Central Bank (ECB) and the national competent authorities (NCAs) of euro area countries and other participating countries (participating Member States).
The three main aims of the SSM are to:
• Ensure the safety and soundness of the European banking system
• Increase financial integration and stability
• Ensure consistent supervision
The German Federal Court of Justice (Bundesgerichtshof – BGH), ruled in its decision recently that left monies in companies (in this ruling especially the German “GmbH & Co. KG”) may be regarded as deposit business for which a banking license is needed. Doing deposit business without such license may create a compensation claim and even can result in criminal penalties for the managing directors.
In this ruling the plaintiff – a member of a winemaker society – demanded compensation from the director of the debtor company (here a German GmbH & Co KG) for monies he left with the company.