What is BaFin

The Banking Act (KWG) is the legal basis for banking supervision by BaFin.[18] It monitors compliance with the rules and guidelines of the Banking Act relating to credit and financial institutions. BaFin emphasizes the role of Identity and Access Management (IAM) and permission management in strengthening the cybersecurity of financial institutions. They recommend the use of least privilege access, meaning every user must only be given the minimal levels of access necessary to complete their job functions. To maintain the integrity and stability of the financial system and combat money laundering BaFin is obliged, under the Banking Act, to run a centralized computer system that stores information on all accounts and their account holders. This information must be provided to BaFin by all financial institutions in Germany.

However, in the context of information technology and cybersecurity, it encourages financial institutions to adopt secure DevOps practices. These practices focus on incorporating security checks throughout the development process, rather than seeing security as an afterthought. BaFin acknowledges the significance of cloud infrastructure and SaaS as they offer scalability, cost efficiency, and operational flexibility. However, they stress the need for stringent security measures, data protection, and regulatory compliance. Financial institutions are expected to thoroughly assess the risks, like potential data breaches, before transitioning to the cloud.

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In addition, BaFin may order special tests, which are also carried out by members of the Poloniex Crypto Exchange Bundesbank on the spot. The Federal Financial Supervisory Authority (BaFin) warns consumers about the website bitak.co. According to information available to BaFin, financial and investment services are being provided on this website without the required authorisation.

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We believe in the member-driven set up of the European supervisory authorities as an indispensable pillar of their organization. We continue to adhere to the bottom-up approach that all 27 or 28 member states or supervisory authorities should contribute to. We cannot ignore the fact that we still have different financial markets and peculiarities or even special features within the national markets. Of course, we understand that ESMA is best suited to take on tasks that relate to cross-border issues. Critical benchmarks are certainly an issue where ESMA can play a stronger role.

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1. In particular, the financial condition of solvency and liquidity, including having appropriate risk control – and management systems as described in the MaRisk-circulaire.
2. Similar to bank supervision, the Insurance Supervision Law (VAG) requires insurance companies to receive and maintain their business with the approval of BaFin, and the conditions are similar to those of banking supervision.
3. It provides a balanced approach to supervision, preventing unfair practices while fostering healthy competition.
4. BaFin is responsible for the supervision of a wide range of financial services, including capital markets, banking institutions and insurance.

While BaFin doesn’t mandate a specific cybersecurity framework, it emphasizes the importance of financial institutions having a comprehensive and efficient cybersecurity mechanism in place, much of which can be automated. This includes having a proper risk management and mitigation plan, secure data protection measures, and regular security audits and assessments. Ongoing employee training in cybersecurity is also encouraged to boost the overall security posture of the institution.

Throughout their operation, financial institutions are subject to ongoing supervision by the BaFin. In particular, the financial condition of solvency and liquidity, including having appropriate risk control – and management systems as described in the MaRisk-circulaire. The establishment of new banks in Germany is subject to a compulsory license subject to law, BaFin, as the competent authority, approves such licenses. It takes into account the management, minimum capital requirements, reliability, solid leadership, and the sustainability of the business when approving licenses. BaFin encourages financial institutions to have robust temporary access control mechanisms. The institution should monitor and log this access, ensuring that it’s revoked when no longer needed to prevent any potential cybersecurity threats.

BaFin advises the Ministry regarding emerging market developments and new regulatory proposals in all areas covered by BaFin’s supervision. You can search for companies which hold an authorisation, have passed the notification procedure as specified above or have established a representative office in Germany by clicking the Database of companies link. The Federal Financial Supervisory Authority (BaFin) warns consumers about the company RedPoint Invest and the services it is offering. The company is offering financial and investment services without the required authorisation under the German Banking Act (Kreditwesengesetz – KWG) or the German Investment Firm Act (Wertpapierinstitutsgesetz – WpIG). The company is leading investors to believe it can sell them shares in Northvolt AB and Databricks Corporation.

Entitle is a seamless way to grant employees granular and just-in-time access within cloud infra and SaaS. BaFin enforcement powers range from the issuing of subpoenas and questioning people, suspending or prohibition trading in financial instruments up to being able to forward cases to the public prosecutor. The Sustainable Finance Disclosure Regulation creates transparency regarding sustainability, but it often fails to make investment decisions easier for investors in practice.

Insurance

Established in 2002, it combines the responsibilities of the three former federal supervisory agencies for banking, securities, and insurance. The institution is responsible for the surveillance and regulation of banks, financial service companies, insurance companies, and various financial markets and transactions. BaFin’s establishment aims to maintain Germany’s financial system’s stability and integrity by monitoring market participants, ensuring transparency, and safeguarding consumer interests. It provides a balanced approach to supervision, preventing unfair practices while fostering healthy competition.

The main task of BaFin is the supervision of banks, insurance companies, and the trading of securities and ensure the viability, integrity, and stability of the German financial system. On the supply side, it pays attention to the solvency of banks, insurance companies, and financial institutions. For investors, bank customers, and the insured it ensures confidence in the financial markets and the companies operating therein. Any entity engaged in the German finance sector, including banks, insurance companies, financial service providers, and investment funds, needs BaFin for the regular conduct of their businesses. Not only does BaFin monitor these institutions to ensure they are operating in compliance with German financial laws and regulations, but it also provides operating licenses required for these entities.

BaFin created a working group together with the Federal Lawyer’s Chamber, Assessor accountant, notaries, tax advisers and public accountants. The main objective of this group is to define “indications of possible money laundering activities” in connection with the work of the professions represented in this group. Furthermore, the Federal Chamber is in the process of establishing special Guidelines for its members, particularly in the interpretation of the Money Laundering Act. All information will be assessed and evaluated in close cooperation with the Deutsche Bundesbank.