EU branches: Without permission at the German market or still under German law obligations?

Basically banks and securities traders from the European Economic Area do not require a separate authorization from the Federal Financial Supervisory Authority (BaFin), if they would like to establish a branch in Germany and / or if they are about to take action in cross-border services. By using this so-called "European Passport", the Authority in the home country of the bank or securities trader reserves the general oversight authority.

Nevertheless; there are also several regulatory provisions in Germany that must be fulfilled particularly by branches. BaFin notifies the bank about these obligations in advance in a so-called standardized "Welcome Letter". However, due to the generic enumeration of the relevant German sections the real content of the obligations that exist for the branch in Germany are often under-estimated.

For example there exist extensive reporting requirements also for branches under the Foreign Trade Regulations depending on their business activities in Germany (see also Article External sector statistical reporting – to be observed when founding a bank?), to conduct statistical reporting, regulatory reporting and / or reports under the Securities Trading Act. In addition, securities traders must consider certain information duties and rules of conduct towards their German customers. It is therefore strongly advisable to take early appropriate organizational measures to ensure compliance with these and other regulations.

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