The European Parliament has adopted the revised version of the Payment Services Directive (PSD2) on October 8th, 2015. Before it can be published in the Official Journal of the European Community, the Directive still needs to be approved by the Council of Ministers of the European Union. After the approval, the Directive has to be implemented into national law within two years by the member states.
The revision of the Payment Services Directive will lead to amendments and adoptions of previous Directives and Regulations as well as the German Payment Services Supervision Act (ZAG).
As explained in the preceding post regarding the recent PwC-Whitepaper “Establishment of banks: an option for corporations?”, the establishment of corporate-owned banks is not a strategic option for the german industrial sector even though the automotive industry is using them with great success.
These results contrast with the high demand for individualized financial services. Every other surveyed corporation wishes for increased efficiency and professionalization of financing activities within the firm. Beyond that working capital-management (36%), securing sales (34%), securing the supply-chain (27%) and diversification of business activities (27%) were central needs.
It’s hard to imagine an automotive industry without corporate-owned financial institutions. Sector expertise concerning customer data, residual values and distribution channels allow for lending and leasing as well as the offering of appropriate insurance-models at attractive terms. In addition to these products the corporate-owned banks also offer classic banking products such as day-to-day money or credit cards. Thus they do not only optimize corporate financial activity but also enhance customer loyalty. Are corporate-owned banks therefore the next logical step towards an evolved industrial business model and can increased establishment be expected in the future?
FINMA and BaFIN finally came to an agreement regarding all the required concrete measures for the so called “Simplified Exemption Procedure”. Thereby the regulatory framework for the market entry of Swiss banks in Germany will be facilitated.
In the past, Swiss banks going for a business activity in Germany without establishing a physical presence were required to meet several conditions which made conducting business operations more complicated. In particular, Swiss banks had to involve a locally active German / EEA bank for the customer identification of private clients.
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).
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).
We did it again: The 4th revised edition of “Banking Business in Germany” is now available.
Also the new edition was developed in close cooperation between the Association of Foreign Banks in Germany (Verband der Auslandsbanken in Deutschland e.V.) and PwC.
The book’s subtitle tries to explain its ambition in one short sentence:
“A practical guide for foreign banks establishing a subsidiary or a branch in Germany”
True. But actually the book covers much more: It presents a current overview of the economic, regulatory, legal and tax framework that applies to credit institutions and financial service institutions in Germany.
As time goes by …
Time is relative. But from a regulatory perspective the last four years since 2007 brought close to epochal changes. In nearly all areas of the financial industry the measures taken to scope with the financial crisis led to fundamental amendments and new regulations which already transformed the industry sustainably and will further do so in future.
What you can look forward to
On 30 April 2011 the transitional provisions of the Payment Services Act (ZAG) are going to end. According to that, companies who already had a license to provide money transfer business and credit card business before 25 December 2007, and companies who have provided their activities in the area of payment services (for example, the payment authentication business) without a license before 25 December 2007 can make use of the transitional provisions until 30 April 2011. However, starting on 1 May 2011, they require a licence according to the Payment Services Act to carry out the respective payment services. This licensing procedure includes the submission of extensive documentation to the Federal Financial Supervisory Authority (BaFin). Amongst others the submission of documents concerning the proof of the required initial capital, the business plan including a budget planning for the first three fiscal years as well as a description of the internal control mechanisms and the representation of the organizational structure is necessary. Since BaFin has to decide about the application only within three months after the complete documentation was submitted and since it is no longer allowed to conduct payment services according to the Payment Services Act without respective authorization after the expiry of the transitional provision, there might be a need for action.