| January | The new European framework for insurance supervision, Solvency II, enters into force.
BaFin's new Consumer Protection Department starts its work.
BaFin publishes new editions of its Guidance Notice on management board members pursuant to the German Banking Act (Kreditwesengesetz – KWG), the German Payment Services Supervision Act (Zahlungsdiensteaufsichtsgesetz – ZAG) and the German Investment Code (Kapitalanlagegesetzbuch – KAGB) and its Guidance Notice on members of administrative and supervisory bodies pursuant to the Banking Act (Kreditwesengesetz – KWG) and the Investment Code (Kapitalanlagegesetzbuch – KAGB).
The Basel Committee on Banking Supervision (BCBS) publishes a fundamentally revised framework for market risk capital requirements.
- BaFin – in consultation with the European Central Bank (ECB) and still under the transitional provisions (Übergangsregelung) – grants banking authorisation to EIS Einlagensicherungsbank GmbH, Berlin. The institution, a joint venture of the Association of German Banks (Bundesverband deutscher Banken) and the Auditing Association of German Banks (Prüfungsverband deutscher Banken), has been established to improve the responsiveness of private deposit protection in cases where an institution protected by the deposit protection fund is at risk of getting into financial difficulties.
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| February | The Insurance Distribution Directive (IDD) enters into force; it has to be transposed into national law by 23 February 2018.
BaFin issued a ban on disposals and payments (moratorium) for Maple Bank GmbH because of a threat of excessive balance-sheet debt. Shortly afterwards, it files an application to initiate insolvency proceedings and then also determines that a compensation event has occurred.
- The intention of Deutsche Börse AG and the London Stock Exchange Group to merge under a joint holding company (HLDCO123 PLC) is made public in an ad hoc disclosure published by Deutsche Börse AG.
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| March | The ECB cuts the interest rate for main refinancing operations from 0.05% to 0%. At the same time, it lowers its rate for the marginal lending facility from 0.3% to 0.25% and the deposit facility rate from –0.3% to –0.4%.
The German Act Implementing the Mortgage Credit Directive (Gesetz zur Umsetzung der Wohnimmobilienkreditrichtlinie) enters into force. The amendments to, among other laws, the German Civil Code (Bürgerliches Gesetzbuch) and the Banking Act, are intended to give consumers the best possible protection when buying residential property.
The European Commission publishes a delegated regulation, which sets out, among other things, detailed requirements for the contents and supervisory assessment of recovery plans and the conditions for intragroup financial support.
The ECB publishes its regulation on the exercise of options and discretions available in Union law as well as a guide on harmonising options and discretions in banking supervision.
- Under its Financial Sector Assessment Program, the International Monetary Fund (IMF) also scrutinises BaFin's work (FSAP assessment) in February and March.
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| April |
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| May | The first Supervisory Review and Evaluation Process (SREP) for less significant institutions (LSIs) is launched, with over 300 LSIs coming under scrutiny. At the end of July/beginning of August, BaFin sends out the first SREP notices stipulating an individual capital add-on.
- The European Commission publishes a delegated regulation setting out the criteria for determining the minimum requirement for own funds and eligible liabilities (MREL).
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| June | The provisions of the German Payment Accounts Act (Zahlungskontengesetz) relating to the basic payment account enter into force. It gives every consumer the right to open an account with basic functions (basic payment account). BaFin is mandated to enforce, upon request, the institutions' obligation to contract.
The obligation to clear certain interest rate derivatives against a central counterparty enters into force for larger market participants that already belong to a central counterparty. In 2017, this obligation will be gradually extended to other products and smaller market participants.
In a referendum, the British people vote with a slim majority for the United Kingdom to leave the European Union (Brexit referendum).
BaFin publishes FAQs on investing own funds in accordance with section 25 (7) of the Investment Code; the catalogue is continually updated.
- The effective date of the European Markets in Financial Instruments Directive II (MiFID II) and of the Markets in Financial Instruments Regulation (MiFIR) is postponed by one year to 3 January 2018. The EU member states' implementation deadline for MiFID II is extended to 3 July 2017.
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| July | The first parts of the German First Financial Markets Amendment Act (Erstes Finanzmarktnovellierungsgesetz) enter into force.
BaFin establishes a central contact point for whistleblowers, which can be used to report violations of supervisory requirements.
The Market Abuse Regulation (MAR) is now fully in force in all EU member states. The MAR has resulted in changes to the provisions governing the ban on market manipulation and to insider law. In addition, the MAR has tightened the sanctions regime.
BaFin publishes initial figures on Solvency II, based on data supplied by insurance undertakings as at the beginning of the year (day 1 reporting) and on the quantitative reports for the first quarter.
The BCBS publishes its revised securitisation framework, which comprises capital requirement rules for simple, transparent and comparable securitisations.
BaFin publishes a general administrative act on the submission of supervisory financial information in accordance with Regulation (EU) No 2015/534 of the ECB.
BaFin begins the hearings phase relating to a planned prohibition on the marketing, distribution and sale, to retail clients, of what have up until now been referred to as credit-linked notes. The associations of the affected issuers and distributors take this opportunity to publish a comprehensive voluntary undertaking on 16 December 2016. In response, BaFin announces that it will suspend its planned ban and examine the effect of the voluntary undertaking.
The European Banking Authority (EBA) publishes the results of its Europe-wide stress test. A total of 51 institutions took part in the EBA stress test, including nine German institutions.
- Two German central cooperative banks, WGZ Bank AG and DZ Bank AG, merge into DZ Bank AG, now Germany's third largest commercial bank.
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| August | - BaFin submits the German Remuneration Ordinance for Institutions (Institutsvergütungsverordnung) and the associated interpretive guidance for consultation.
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| September | The restructuring of two major German energy utilities, E.ON SE and RWE AG, leads to the IPOs of Uniper SE and innogy SE.
The provisions of the German Payment Accounts Act relating to help with switching account enter into force.
- BaFin amends the German Solvency Regulation (Solvabilitätsverordnung) for banks to bring it in line with the ECB regulation on options and discretions.
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| October |
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| November | In November and December, BaFin organises a total of four workshops on the transparency requirements under the MAR. The workshops are aimed in particular at issuers admitted to trading on multilateral trading facilities (MTFs).
The Financial Stability Board (FSB) again designates nine insurance groups as global systemically important institutions.
The European Commission publishes a reform package with proposed legislation intended to strengthen the resilience of banks and to reduce risks in the banking sector.
- The European Commission publishes proposed legislation for the recovery and resolution of central counterparties.
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| December | The Federal Republic of Germany assumes the chairmanship of the Group of Twenty (G20).
The obligation to use key information documents for packaged retail and insurance-based investment products (PRIIPs) pursuant to the PRIIPS Regulation is postponed by one year to 1 January 2018.
The European Parliament, the European Council and the European Commission reach agreement on the new Prospectus Regulation.
BaFin submits for consultation the draft of a planned general administrative act, which it intends to use to restrict the marketing, distribution and sale of contracts for difference (CFDs). To ensure the protection of retail clients, offerings for these clients will only be allowed to contain product variants that do not entail an obligation to make additional payments.
The amendments to the German Reports Regulation (Anzeigenverordnung) enter into force. The regulation thus reflects, among other things, the amended provisions under EU law and the resulting modifications to the German Banking Act and the ECB's function as a supervisory authority.
The European Insurance and Occupational Pensions Authority (EIOPA) publishes its final report on the 2016 Europe-wide stress test for insurance undertakings. The results confirm BaFin's assessment of the effects the persistent low interest rate environment is having on German life insurers.
A report by the Joint Committee of the three European Supervisory Authorities on reducing reliance on credit ratings is addressed to the national competent authorities, which supervise the users of credit ratings. The report is intended to contribute to ensuring that the EU Credit Rating Regulation is interpreted consistently throughout Europe.
Based on its investigation of closet indexing, BaFin intends to impose greater transparency requirements on the fund industry. To this end, it submits for consultation a draft publication on the inclusion of additional disclosures in prospectuses for retail funds.
The Federal Cabinet adopts the draft of the German Occupational Pensions Reform Act (Betriebsrentenstärkungsgesetz), thus initiating a comprehensive package of measures to expand occupational retirement provision.
The Act Amending the Insolvency Code and Amending the Act Introducing the Code of Civil Procedure (Gesetz zur Änderung der Insolvenzordnung und zur Änderung des Gesetzes betreffend die Einführung der Zivilprozessordnung) is promulgated in the Federal Law Gazette. In response to a decision of the Federal Court of Justice (Bundesgerichtshof) of 9 June 2016, legislators amended section 104 of the German Insolvency Code (Insolvenzordnung) to the effect that netting clauses can be agreed again that are protected against insolvency and also meet the requirements for supervisory recognition, in particular pursuant to the Capital Requirements Regulation (CRR).
The new Directive on the activities and supervision of institutions for occupational retirement provision (IORP II Directive) is published in the Official Journal of the EU. It contains more detailed rules on corporate governance and on the information requirements to beneficiaries than the previous directive.
An amendment to the Act Establishing the Federal Financial Supervisory Authority (Gesetz über die Bundesanstalt für Finanzdienstleistungsaufsicht – FinDAG) enters into force. The catalogue of costs to be reimbursed separately by the affected institutions included in section 15 of the Act Establishing the Federal Financial Supervisory Authority is expanded: it now also comprises the costs of BaFin and the Bundesbank if incurred as a result of an examination ordered by the European Central Bank. This means that the ECB does not bill for these costs directly.
BaFin issues a general administrative act for capital requirements relating to interest rate risk in the banking book that has not yet been considered in the SREP process.
- The German Act for the Reorganisation of the Functions of the Financial Market Stabilisation Agency (Gesetz zur Neuordnung der Aufgaben der Bundesanstalt für Finanzmarktstabilisierung – FMSA Reorganisation Act) is promulgated in the Federal Law Gazette. It governs the incorporation of parts of the FMSA into BaFin. On 1 January 2018, BaFin will take on the functions of the national resolution authority from the FMSA, which is the competent authority until then. The remaining part of the FMSA performing the functions in connection with the management of the Financial Market Stabilisation Fund (Finanzmarktstabilisierungsfonds – FMS) will be integrated into the German Finance Agency.
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