regulatory brexit, banks, uk, finance

Article

Regulatory Spotlights on Brexit

What are the major challenges banks have to address, if they are relocating to Germany?

With the UK’s exit from the European Union UK banks will lose their ability to offer financial services across national borders – the so called “passporting” provisons. Therefore, UK banks and other financial services providers may need to relocate entities to a remaining EU country and apply for a new EU banking or financial institution license for example in Germany.

There are several major challenges a bank has to address under those circumstances. Deloitte explains several topics below, which are relevant for
day 1 after the Brexit due date.

 

Booking Models:

Banks relocating to Germany as a result of Brexit should pay particular attention to their booking strategy. Although back-to-back booking is accepted by BaFin, the German National Supervisory Authority, relocated banks should have a certain level of trading and hedging capacities in place preventing them from being qualified as an “empty shell”. BaFin is expected to tighten its booking model requirements from 2021 onwards. Therefore, banks will need to be alert on their booking strategies more than ever.

Contact

Philipp Fründ
Tel: +49 (0) 711 16554 7489
pfruend@deloitte.de

Mathias Schüler
Tel: +49 (0) 30 25468 5930
mschueler@deloitte.de

Regulatory Spotlights on Brexit - Booking Models

Outsourcing:

German subsidiaries and branches of UK banks wishing to outsource their activities to entities outside the EU should be fully compliant with German local regulatory requirements with regard to outsourcing, such as those arising from the German Banking Act and the MaRisk. Those requirements include, among others, the unimpaired supervision of the outsourcing institution in cases of cross-border outsourcing, setting up an outsourcing inventory including all intragroup and external outsourcings and conducting an outsourcing risk assessment for all identified outsourcings. Banks must reflect those requirements in their outsourcing management from day 1 onwards.

Contact

Osman Sacarcelik
Tel: +49 (0) 69 71918 8454
osacarcelik@deloitte.de

Gerhard Dengl
Tel: +49 (0) 69 75695 6457
gdengl@deloitte.de

Regulatory Spotlights on Brexit - Outsourcing

ICAAP:

Banks relocating to Germany will directly be supervised by BaFin, if they are classified as less significant institutions (LSI) and by the ECB, if they fulfil the criteria of ECB supervision. For BaFin supervised banks German regulatory requirements on ICAAP are laid down in the German Banking Act, the MaRisk and the recently revised BaFin Guideline. For ECB supervised banks the recently published ECB guide is applicable. The applicable rules on ECB as well as on German national level newly adopt two perspectives, the normative perspective and the economic perspective. Therefore, UK banks will have to address German and EU-specific regulatory requirements within their ICAAP approaches for the German entity.

Contact

Thorsten Wächter
Tel: +49 (0) 89 29036 7379
twaechter@deloitte.de

Natalia Treskova
Tel: +49 (0) 211 8772 2139
ntreskova@deloitte.de

Regulatory Spotlights on Brexit - ICAAP

Fanden Sie diese Information hilfreich?

Verwandte Themen