Funding required for running the business
As already posted on June 2012 (see below), from July 2013 on all collective investment schemes, which are not already covered by the UCITS Directive [Directive for the regulation of collective investment undertakings; Directive 2009/65/EC] are regulated by the AIFMD. Therefore fund managers of so-called “alternative” funds, such as private equity funds or hedge funds generally are required to obtain a license for their activities.
There are numerous requirements that have to be met in order to obtain an AIFM-license by the Federal Financial Supervisory Authority (BaFin). One of these conditions is the availability of adequate capital.
In order to offer financial services today, companies usually require a banking license and are therefore subject to the supervision of the BaFin. However, there are financial services which can be exempted from the supervision and are therefore not bound to license requirements. These businesses named “Financing Without a Bank” are often ancillary or secondary businesses, which can be offered as a complement to the core business. A possible release of the license requirements depends on the business volume of the respective company.
I am proud to announce that the latest, the 3rd, 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 and, like the former editions, is endorsed by the State-Government of Hesse.
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"
An increasing number of companies will be obliged to submit emission allowances in the future. More companies will participate in trading for the purpose of covering and securing their need for emission allowances. However, certain arrangements of such transactions can trigger a license requirement of the involved entity. Under certain circumstances, the application for a banking license for trading in emission allowances may be required.
The German Supervisory Authority has clarified the scope of the license requirements in a recent guidance notice. By doing so, it aligned its orientation in this matter with the given legal status in Europe.
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.